IDBI Bank stock: Check best level to buy, even better level to buy more; brokerage eyes turnaround, pins target

financialexpress.com:

IDBI Bank stock provides a turnaround opportunity to investors, with a potential upside of up to 25% in one year or so, said HDFC Securities in a research note. The brokerage report recommended the investors to buy the shares of IDBI Bank between Rs. 54.8 – 55.9 (1.15x FY25E ABV). It noted that, “the improved financial condition of the bank and the proposed disinvestment of Government’s stake, provides an opportunity for a turnaround in the bank’s story on the back of a potentially professional management taking charge.”

The report further said that, “we feel that investors can buy the shares of IDBI Bank between Rs. 54.8 – 55.9 (1.15x FY25E ABV) add more on dips to Rs. 48.5 – 49.5 band (1.02x FY25E ABV). We expect the Base case fair value of Rs. 61 (1.27xFY25E ABV) and the Bull case fair value of Rs. 68 (1.42xFY25E ABV) over the next 4-5 quarters. 

Regarding the bank’s recent performance, the report mentions that in Q4FY23, IDBI Bank reported total advances of Rs. 1,62,568 crores, representing a 19% YoY increase and a 10% QoQ increase. Additionally, total deposits reached Rs. 2,55,499 crores, showing a 10% YoY growth and a 19% QoQ increase. The report highlights the healthy CASA balance growth of 2% YoY and 7% QoQ, amounting to Rs. 1,35,455 crores. “The balance sheet remains well capitalized with total CRAR at 20.44%, Tier I at 18.08% and Tier II at 2.36% as at March, 2023. Further, as of March 2023, the bank has 1,928 branches and 3,334 ATMs,” said the report. 

The HDFC report took a bullish view on IDBI Bank shares by saying that, fighting against its patchy history, the bank had succeeded in increasing its profitability and clear up the asset book bank had been able to once it was included in the PCA framework of the