Brokerage firms have revised their outlook on two major banking stocks following the June quarter (Q1 FY27) earnings. CLSA and Nomura upgraded their outlook on IDFC First Bank, raising the stock's target price to ₹95, while several global brokerages reduced their target prices for Bank of Baroda despite retaining positive recommendations.
The revised targets come after both lenders announced their quarterly financial results over the weekend.
CLSA Upgrades IDFC First Bank to 'Outperform'
Global brokerage CLSA upgraded IDFC First Bank from 'Hold' to 'Outperform' and increased its target price from ₹73 to ₹95.
The revised target suggests an upside potential of nearly 19% from current market levels.
Brokerage Nomura also turned more optimistic, raising its target price from ₹85 to ₹95 after evaluating the bank's June quarter performance.
Why Brokerages Are Bullish on IDFC First Bank
According to CLSA, IDFC First Bank has made a strong recovery following the challenges linked to the Haryana-related incident.
Key positives highlighted by the brokerage include:
Deposits increased 18% year-on-year
CASA ratio improved to 51%, among the highest in the Indian banking sector
Improved deposit franchise
Strong operational performance
Reflecting this optimism, CLSA also increased its FY27 and FY28 Earnings Per Share (EPS) estimates by 9% and 17%, respectively.
Bank of Baroda Faces Target Price Cuts
While analysts continue to remain largely positive on Bank of Baroda, several brokerages have reduced their target prices after reviewing the bank's June quarter results.
The target revisions were primarily driven by:
One-time provisioning impact
Lower fee income
Pressure on medium-term profitability
Latest Brokerage Views on Bank of Baroda
Citi
Rating: Buy
Target Price: Reduced from ₹340 to ₹310
Macquarie
Rating: Buy
Target Price: Reduced to ₹310
JPMorgan
Rating: Overweight
Target Price: Reduced to ₹315
HSBC
Rating: Hold
Cited concerns over medium-term return ratios.
Analysts Still Positive on Bank of Baroda
Despite the lower target prices, investor sentiment remains constructive.
According to Bloomberg-tracked analyst data:
Around 75% of analysts continue to recommend 'Buy' on Bank of Baroda.
Most brokerages believe the bank's long-term fundamentals remain intact despite short-term earnings pressure.
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