Long

[TechnoFunda]IDFC FIRST BANK – DEEP DIVE INTO MULTI-YEAR SUPPORT

TECHNICAL ANALYSIS:

Ascending broadening channel structure
– Since the Aug-20 low (~₹15) price has traced a steady up-sloping trendline, touching in Mar-21, Feb-22 and now Apr-25
– Parallel resistance capped rallies in Feb-18 and Sep-23, defining a ~₹80–100 supply zone
– Channel slope averages ~30% annualized gains from support to resistance

EMA confluence and momentum
– April formed a bullish engulfing candle that closed above the 50 EMA (₹63.8), signalling renewed buyer conviction

Elliott-style wave count
– Wave 1: Aug-20 to Feb-23 advance into channel top (₹100)
– Wave 2: Feb-23 to Apr-25 retrace back to support/200 EMA (₹55)
– Wave 3 (projected): expected to carry price toward channel top again, targeting ₹95–100

Measured-move & targets
– Channel height (~₹85–15 = ₹70) added to support gives a potential target near ₹125 – bullish scenario only on a clean break above channel resistance
– Shorter-term target zone: ₹75 (minor swing highs) → ₹85 (channel midline)

Risk management
– Invalidation: monthly close below ₹55 erodes the uptrend and negates wave-count
– Use a stop 1.5× ATR below the Apr-25 low (₹50) for defined risk

FUNDAMENTAL ANALYSIS:

Revenue & earnings trajectory
– Quarterly revenue up from ~₹40 B in 2020 to ₹113 B in Q1 ’25, reflecting strong loan book growth and fee income diversification
– Net income swung from losses in 2018–19 to a peak of ~₹12 B in 2023, and stays positive at ₹3 B in the latest quarter

Asset-quality improvement
– GNPA ratio down from ~2.2% in 2020 to ~1.3% in Q1 ’25; PCR steadily rising above 75%
– Slippages have trended lower quarter-on-quarter, supporting margin stability

Margin & capital metrics
– Net interest margin at ~4.2%, above industry average, driven by retail and SME lending
– CET-1 ratio comfortably above 13% with Tier-1 capital buffer, enabling healthy credit growth

Valuation & catalysts
– Trades at ~0.4× book value and 10× trailing P/E vs sector averages of 1.5× and 15× respectively
– Potential rerating catalysts: continued NIM expansion, sustained reduction in credit cost, digital customer growth

MACRO & SENTIMENT CONTEXT:
- RBI rate cycle poised for cuts in H2 ’25, which could support credit demand
- Bank Nifty outperforming broader markets; institutional flows have rotated into midcap banks
- Relative strength vs Nifty: RSI on a monthly sits near 50, rising from oversold – room to run before overbought

TRADING PLAN:
- Enter partial long near current price (₹66–70)
- Add on break above ₹75 with conviction
- Targets: ₹75 → ₹85 → ₹95–100 (channel top)
- Stop-loss: ₹50–55 zone (monthly close basis)
- Trail stops above each new swing low to lock in profits as price advances

TradZoo

📈 Trade Smarter with TradZoo!
🔗 Website: bit.ly/tradzoopage
📣 Telegram: t.me/tradzooIndex
📲 Android App: bit.ly/TradZooApp
📲 Forex App:tradzoo.com/forex/download
🍎 iOS App: bit.ly/TradZoo-iOS-App

Also on:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

TradZoo

Also on: