IDFC FIRST BANK Q2 2020 | Result Update

IDFC FIRST BANK Q2 2020 | Result Update


Welcome to value educator where you learn how to create wealth in stock market by investing. I am shashank and today we will discuss about Q2 2020 results of IDFC First bank I already created 2 videos on IDFC bank in which i explained about their business model and their performance after the merger. You can watch those videos, you will get link in the description. So nw we will discuss about about current which qtr result which was Q2 2020.As you can see this is an income statement. As you can see here 1363 Cr is the net income for this qtr and it increased qtr to qtr and451 Cr was before merger. IDFC Bank got merged with capital first in December 2018 so in sept 2018qtr net interest income is less.Their operating expenses also increased as they are doing their branch expansions.We will discuss about it later in video If you will check profit before tax (PBT), they posted 100 Cr PBT for first time while in all other qtrs they posted loss.In June 2019 they posted 963 Cr PBT while in Sept 2018 they posted 583 Cr PBT. They posted profit after tax of 71 Cr before DTA adjustment and this is also 1st time in history they posted a profit.I have mentioned in previous videos that this stock will require some time as they are doing branch expansions. If you will check they mentioned DTA. DTA means Differed Tax assets. So this is the accounting one time entry and due to this DTA we are getting net loss of 680 Cr.If you will check PAT after DTA then loss increased compared to previous qtrs. But profit before tax is important and it is positive. So i think this is the very good result they posted.There are DTA adjustments that is why the net profit is negative and axis bank also did same adjustments.We will discuss about different parameters We will go to first page of the report. Most of the details are here.CASA also improved its around 18.7% now.We will discuss about it in detail as we progress in video.Another important thing is total number of branches are now 351 and in last qtr it was 279, so they increased their branches. After that if you will check GNPA and NNPA then it is stable and reduced a bit compared to last qtr. Retail loans or assets are another important parameter and it is contributing 45% of total loan which was 40% before.I mentioned the videos which i posted before that management wanted to increase their retail loan book and they wanted to reduce wholesale and infrastructure loans.It is 5 year plan and it just started now. here if you will check total loan book is 1,07,656 Cr and it was 1,12,558 Cr so there is degrowth in loan book and the reason for this degrowth is they reduced their wholesale and infra loans, we will check those details as we progress.But if you will compare retail loan book share compared to the previous qtr then it was 40% before and now it increased to 45% Now we will check the details of loan book.We will discuss this in details as it is important.Total retail funded assets were 44642 Cr in June 2019 and it increased to 48069 Cr in this qtr so there is growth in this.Here they given % details compared to total loan book. It was 35% before then 40% and now it is 45% of total loan book. Similarly in the corporate segment, they reduced their loan book. It was 32352 Cr and now it is 29165 Cr.So they reduced this loan book by 2300 Cr.In infrastructure segment also they reduced their loan book.Initially it was 22000 cr then it reduced to 20000 cr and now it is 17000 Cr. So total loan book share will keep increasing in future. We will discuss few more ratios. They mentioned net interest margins here.It was 1.56% before merger in June 2019 it increased to 3% and in current qtr it increased to 3.43% so their is 430 Bps increase in net interest margins. Here they mentioned about GNPA and NNPA. So if you will compare qtr on qtr it reduced a bit. There is huge stress in real estate and infrastructure sectors and still, IDFC first banks maintained their NPAs.In RBL bank case their NPA and provisions got increased.In this case if you will check Mr.Vaidyanathan did most of provisions in last qtr. So from this we can see how conservative management is and it gives long term clarity. In banking segment, it is very important to have good banker, if the banker is good then the bank can keep growing for 10-15-20 years. If you will check in HDFC bank,kotak bank or Bandhan bank case then they performed very well. After NPA we will discuss on some other ratio, so we can understand how they performed.Here they mentioned about CASA ratio.If you will check CASA, it was 8.68% then 11.4% then 14.57 and currently, it is at 18.7%. So there is good growth in casa.As i mentioned CASA is ratio of current and saving account deposits compared to total borrowing.Higher CASA is good for bank and their net interest margins can improve. Here they mentioned total amount of CASA in Cr.It is 12473 Cr currently while it was 9594 Cr in June 2019.So they increased their CASA by 3000 cr in this qtr. Here again they gave details of CASA as % of deposits and CASA as % of borrowings + deposits.CASA as % of deposits was 12.98% in sept 2018 then it was14.57% and now it is 18.7% and similarly CASA as % of borrowings +deposits also increased. Now we will discuss about provisions they did in this qtr.Here you can check their provisions. In sept 2018 it was 601 then 1281 in June 2019 and now they did provisions of only 317 Cr. So provision reduced because they already did high provisions which was regarding DHFL and Reliance capital. Till Q1 2020 they did total 70% of provisions of these accounts. So as stress in infrastructure and realty segment will reduce then these provisions will further come down and then bank will start showing a profit.So Mr.vaidyanathan planned about this and banks is on the correct path and he will develop retail focused bank. We will discuss about few more ratios.Here you can check details about them. Most important thing in this qtr is their branches. Currently, they have 367 branches while at the end of qtr they had 351 branches and in June 2019 they had 279 branches which mean in Sept qtr they added total 72 branches in 90 days. So they are doing aggressive expansions of branches. I visited one branch and had a word with customer representative and branch manager. So they are aggressive on expansion and CASA improvement.Mr.Vaidyanathan taking right steps to revive and grow the bank, so i think this bank will grow in the future. These are the intial signs which Mr.Vaidyanathan mentioned in 5 year goal and the bank is on the correct path. So i am holding IDFC First Bank stock in my portfolio, I mentioned about in previous videos also that this is long term story and things won’t materialize immediately. Let us see how it reacts when market opens. Mostly it will be green. It depends because they posted loss so retailers can sell it panic.But it is not actually a loss it is because of differed tax.I think this can be a multibagger in next 5 to 10 years. When it fell to 35-36 Rs i averaged it and i will keep holding it for long term. Please like this video and share with friends and don’t forget to subscribe to my channel.We can watch other videos on investing in this channel. So that’s it in this video in next video we will discuss about some other stock in detail.

32 thoughts on “IDFC FIRST BANK Q2 2020 | Result Update

  1. Great your videos are quite detailed, the way you added the number of branches in the previous quarter to the present quarter shows your depth

  2. I hope this bank is going to be India's best bank and then world's best bank. Long live VV, its Managing Director.

  3. Excellent video… Very helpful for retail investors like us who find difficult to read and understand annual reports…

  4. हमारे जैसे लोगों को अपने सभी तरह से हिंदी में बताया है 🙏 🙏 🙏 God bless you 🙏

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