Momentum Pick: After 52-week high, IDFC First Bank shares on way to hit a century

The stock has been on a constant upward trend over the past 1 year. It has given returns of over 95% during this time significantly outperforming sectoral indices Nifty Bank and BSE Bankex who have returned over 25% and 23%, respectively. The returns are also higher than the broader market Nifty50 which has given 14% returns in the last 12 months.

The erstwhile IDFC Bank is trading with a strong momentum, a note by brokerage firm Nuvama said. The stock has potential to make a cut in the MSCI Standard Index in its August review, Nuvama said.

A 15%-17% rally from the current level by the middle of July will push the stock in the index.

Agencies

Source: Nuvama

Rajesh Palviya of Axis Securities: Buy | Target: Rs 85-100 | Upside: Up to 45%

IDFC First Bank is trending higher on a weekly, monthly and quarterly charts forming a series of higher tops and bottoms, Rajesh Palviya, Senior Vice President – Technical and Derivatives Research at Axis Securities said. With the current price, the stock is approaching the multi-year breakout zone of 70 levels, Palviya said.

“Any sustainable up move above this may cause a significant run-up toward new highs. Huge volume spikes on every rally signify rising strength. The increasing, upsloping moving averages and price actions reconfirm bullish trends and sentiments,” the Axis Securities analyst said.

The quarterly down-sloping trendline breakout confirms trend reversal on long-term charts, he said further.

The strength indicator RSI is placed positively across all the time frames, indicating rising strength. The crucial support zone to watch for is Rs 62- Rs 52 levels, the analyst said, adding that the current momentum may extend towards Rs 85 – Rs 100 levels.

Meanwhile, Sudeep Shah, Deputy Vice President, Head of Technical & Derivatives Research (Equity & Currency) at SBI Securities had called IDFC First as his preferred pick in this space. He had recommended the stock for a price target of Rs 71, in chat with ET Now.

The private lender’s standalone profit after tax (PAT) jumped 134% year-on-year (YoY) to Rs 803 crore in the March quarter. This was the highest-ever quarterly profit for the bank.

The bank’s net interest income (NII) in Q4 came in at Rs 3,596.75 crore and was up 34.75% YoY.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)