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