IDBI Bank (IDBI)

FairStock Score: 54/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue growth of 31.17% and profit growth of 28.89% with latest quarter net profit of ₹1,959 Cr on sales of ₹7,080 Cr shows strong operating momentum.
• ROE of 15.08% and Piotroski F-Score of 7/9 indicate a fundamentally improving bank.
• At P/B of 1.29 against book value of ₹57.31, the stock is not expensive; Graham Number of ₹105.55 and DCF value of ₹225.68 suggest potential upside.
• Reported free cash flow of ₹25,458 Cr and dividend yield of 1.81% provide some cushion.
• FairStock Score of 75/100 with a STEADY label suggests stable quality rather than speculative hype.

Concerns

• Promoter holding of 94.71% leaves a very thin free float, limiting liquidity and minority influence.
• Margin of safety is -9.91%, so the current price may be ahead of conservative value estimates.
• Altman Z-Score of 0.56 raises distress flags, though banks require special interpretation.
• ROCE of 6.78% and debt/equity of 5.35 highlight heavy leverage and capital intensity; EV/EBITDA of 1552.96 is not a meaningful bank valuation metric.

AI Analysis

Let me examine IDBI Bank the only way I know: by asking whether the balance sheet is sound, whether the business earns a decent return, and whether I am paying a foolish price. At ₹73.73, the market cap is ₹1.25 lakh crore. Book value is ₹57.31, so I am paying 1.29 times book. That is not a bargain, nor is it outrageous. The latest quarter shows sales of ₹7,080 crore and net profit of ₹1,959 crore, a net margin close to 28%. Sales grew 31.17% and profit grew 28.89%. A 15.08% ROE with a Piotroski score of 7/9 tells me the turnaround looks real. The reported free cash flow of ₹25,458 crore cannot be ignored, though banks generate cash differently from factories. Graham would calculate a Graham number of ₹105.55, and a discounted cash flow estimate is ₹225.68. But the margin of safety is -9.91%, so I cannot say this stock is being offered to me at a discount today. A lender with debt/equity of 5.35 is naturally leveraged; that is the nature of banking. But Altman Z of 0.56 reminds me I am looking at a leveraged institution, and EV/EBITDA of 1552.96 is meaningless for a bank. Return on capital employed is only 6.78%, which shows how capital-hungry this business is. The ownership structure bothers me. Promoter holding of 94.71% means almost no free float. Minority shareholders are price-takers. Dividend yield of 1.81% offers a small reward while waiting. This is a steady turnaround in progress, not a fanatical growth story. If IDBI can sustain these numbers and the promoter ever unlocks value, there may be real upside. For now, I would wait for a lower price or more proof of durable asset quality.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer