Shares of IDFC First Bank rallied more than 8 per cent in early trade on Monday after the private sector lender reported its highest-ever quarterly profit for the first quarter of FY27, driven by strong growth in lending, improvement in asset quality and expansion in net interest margins.
The stock emerged among the top gainers on the BSE after investors cheered the bank's earnings announced over the weekend.
At around 9:25 AM, IDFC First Bank shares were trading at Rs 87.54, up 8.3 per cent from the previous close, reflecting positive market sentiment following the bank's June quarter performance.
Record quarterly earnings lift investor confidence
According to the bank's regulatory filing released on Saturday, profit after tax (PAT) for the April-June quarter stood at Rs 1,075 crore, marking the lender's highest-ever quarterly profit. The figure represents a sharp 132.4 per cent increase from Rs 463 crore reported during the corresponding quarter of the previous financial year.
The strong earnings come amid sustained growth in the bank's overall business, with improvements visible across deposits, lending and profitability metrics.
The earnings performance appeared to boost investor confidence, with buying interest pushing the stock significantly higher during Monday's morning session.
Customer business crosses Rs 6 lakh crore
IDFC First Bank continued to expand its balance sheet during the quarter, with total customer business crossing the Rs 6 lakh crore mark.
The bank said total customer business rose 18.6 per cent year-on-year to Rs 6,04,776 crore as of June 30, 2026, compared with Rs 5,10,031 crore recorded a year earlier.
Growth was also reflected in its lending portfolio.
Loans and advances increased 20.6 per cent year-on-year to Rs 3,05,370 crore as of June 30, 2026, up from Rs 2,53,233 crore in the same period last year, according to the stock exchange filing.
The figures indicate continued business expansion during the quarter as the lender strengthened its credit portfolio.
Asset quality shows further improvement
The bank also reported an improvement in key asset quality indicators during the first quarter.
Gross non-performing assets (GNPA) declined to 1.51 per cent as of June 30, 2026, from 1.97 per cent recorded a year ago.
Similarly, net non-performing assets (NNPA) improved to 0.44 per cent, compared with 0.55 per cent as of June 30, 2025.
The improvement in bad loan ratios comes alongside growth in the loan book, indicating a strengthening of the bank's asset quality during the reporting period.
Net interest margin strengthens
Profitability was further supported by an improvement in the bank's net interest margin (NIM), a key indicator of earnings generated from lending operations.
For the April-June quarter, NIM improved to 5.96 per cent, compared with 5.71 per cent in the corresponding period of the previous year, according to the bank's filing.
The higher margin reflects stronger returns from the bank's interest-earning assets during the quarter.
Contingency buffer created for uncertainties
Alongside its quarterly results, IDFC First Bank said it has made a contingency provision of Rs 515 crore as a prudent measure to prepare for potential macroeconomic and geopolitical uncertainties.
The bank said the additional provision has been created on a precautionary basis, providing a buffer against possible external risks that could affect the operating environment in the future.
The provision comes even as the lender reported improvements across key financial parameters, including profitability, loan growth, customer business and asset quality.
The strong quarterly performance, coupled with healthier asset quality, higher margins and continued business growth, prompted a positive response from investors, with the bank's shares gaining more than 8 per cent in early Monday trade following the announcement of its June quarter results.
