IDFC First Bank (IDFCFIRSTB)

FairStock Score: 38/100 — MIXED

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

Key Financials

Strengths

• Piotroski F-Score of 8/9 indicates solid operational and financial improvement
• Strong free cash flow of ₹11,291 Cr provides liquidity cushion
• Sales growth of 11.61% with latest quarterly revenue of ₹10,417 Cr shows expanding business
• Book value of ₹44.37 offers tangible asset support at 1.53 P/B
• Relatively low P/B of 1.53 if earnings can recover

Concerns

• P/E of 40.11 is steep given profit decline of -18.22% and low ROE of 4.13%
• Promoter holding is 0.00%, leaving no skin in the game
• Margin of safety is -53.01% and price is above Graham Number of ₹48.02
• High debt/equity of 7.63 and Altman Z-Score of 0.46 signal balance sheet stress

AI Analysis

If I were to evaluate IDFC First Bank as a business, the first thing I notice is that I am being asked to pay ₹67.83 for a bank with book value of ₹44.37, which is 1.53 times book. In Graham's language, that is not a margin of safety. The Graham Number, derived from earnings and book value, is ₹48.02—meaning the price is above the defensive investor's threshold. The negative margin of safety of -53.01% tells me the margin is not just absent but uncomfortable. The P/E of 40.11 looks even worse because profits have actually declined 18.22%. A bank earning 4.13% return on equity and 6.22% ROCE is not a marvelous franchise; it is a mediocre capital allocator. The heavy debt-to-equity of 7.63 might be common for banks, but combined with an Altman Z-Score of 0.46, it raises questions about financial stress. The DCF value of ₹702.94 is a fool's gold if future cash flows assume aggressive growth; I rather trust my Graham Number. Still, there are hopeful signs: Piotroski F-Score of 8 out of 9 suggests improving profitability, leverage and efficiency. Free cash flow of ₹11,291 Cr and quarterly revenue of ₹10,417 Cr with profit of ₹479 Cr show the engine is running, and sales grew 11.61%. But a zero promoter holding is concerning; in India, I want skin in the game. This is not a stalwart or fast grower—it is a possible turnaround, needing proof that returns on equity can climb. I will not chase it at this price.

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