Perivis

Summary of earnings call for IDFC First Bank Ltd published on 31 Jul, 2025

IDFC FIRST Bank Limited
Q1 FY26
Call date · July 26, 2025

1 · Management Commentary

Key Positives

Key Negatives

Forward Guidance

2 · Q&A Highlights

Q 1 (Asset Quality & Slippages): Several analysts asked about the rise in NPAs/slippages across segments, especially MSME, MFI, and credit cards, and whether any specific stress is emerging.
A (Management):
• General increase seen, but no specific segment singled out; some stress in rural (notably Karnataka), but collection efficiency improving.
• Credit card NPA at 1.76% (marginal increase, but range-bound); unsecured MSME credit cost in line with overall guidance (~2%).
• No material asset quality deterioration expected; credit cost guidance of 2–2.05% for FY26 reiterated.

Q 2 (Margins & Funding Costs): Analysts queried about NIM trajectory given MFI shrinkage, repo rate transmission, and deposit repricing.
A (Management):
• NIM to see further pressure in Q2 due to lagged repo transmission, but sharp FD rate cuts (from 7.9% to 6.75%) will benefit from Q3/Q4.
• Expect NIM to recover to ~5.8% by Q4 FY26, barring further repo cuts.

Q 3 (Capital Raise): Questions on status and risks to the INR7,500 crore capital raise.
A (Management):
• No risks or delays anticipated; all requisite approvals expected in Q2.

Q 4 (Cost-to-Income & Opex): Analysts sought guidance on cost-to-income ratio and opex growth.
A (Management):
• Opex growth to be contained at 11–12% in near/medium term; cost-to-income ratio targeted at 65% by FY27.
• Current elevated ratio due to income compression (MFI shrinkage, repo pass-through); expect improvement as margins recover.

Q 5 (MFI Business Outlook): Clarification on future of MFI business and margin impact.
A (Management):
• MFI book expected to bottom at ~INR7,500 crores; will resume growth in line with industry post-stabilization.
• MFI impact on NIM to reduce as book stabilizes; no intent to exit the segment.

Q 6 (Deposit Mix & CASA/CA Growth): Questions on CA/SA growth, impact of rate cuts, and plans to improve CA ratio.
A (Management):
• CA as % of CASA at ~15%, but only ~7.5–8% of total deposits; focus on improving CA share to industry levels.
• SA growth strong; FD rate cuts to structurally benefit funding cost in coming years.

Q 7 (Growth Drivers & Competition): Analysts asked about credit growth drivers and competitive intensity, especially in unsecured segments.
A (Management):
• Growth led by wholesale, vehicle, and mortgage segments; no material slowdown or stress seen in MSME/LAP.
• Confident in asset quality; not seeing the stress some peers have flagged.

Q 8 (Repo Rate Transmission): Clarification on timing and impact of repo rate cuts on loan book yields.
A (Management):
• Repo transmission occurs with a lag (reset every 3 months per customer); Q2 to see full impact of June cut.

3 · Other Key Numbers

Any numbers not disclosed in the call are omitted as per instructions.



Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.