IDFC First Bank Limited

“IDFC First Bank has built genuine revenue-side assets — a 6%+ NIM, 47% CASA ratio, and a diversified retail loan book — within a structurally attractive Indian banking market, but has never earned above its cost of equity, runs a 70% cost-to-income ratio, and the FY2025 MFI stress episode exposed how thin the earnings buffer is. At 1.30x book the stock is modestly cheap if management delivers the targeted 1.4% ROA / 13-15% ROE by FY2028, but that outcome is contingent on clean credit cycles and meaningful cost compression — neither of which is yet proven. The right posture is to track for evidence of ROE normalization before building a position.”