IDFC First Bank Share

IDFC First Bank Share: The stock market is under huge pressure, with FII selling heavily and DII not buying enough. Retail investors are in confusion about whether to invest or not.? And if they decide to invest is Banking sector is good for the time being and for the future. Is IDFC First Bank stock the way to go.?

First let me start by saying, that this is only my opinion and in no way you should take as Buy/sell recommendation.

Ok Now let’s move towards the action.

Current Position of IDFC First Bank Share.?

It’s already down around 40% from its high and ever since the Q2 result came the stock is under huge selling pressure. In the last one year the stock hasn’t yielded any returns whereas the market grew around 20%.

Surely it had the overhang of the merger but that’s no excuse for bad Q2 earnings and not growing at least with the industry average. Even after the FED”s rate cut the stock didn’t move even an inch. the present situation of IDFC First Bank shares looks a little bleak. If retail investors decide to invest in this firm what are the factors that one should keep in mind.

Should You invest in the Banking Sector at this time.?

The market is in a strong bear grip, even today (4th Nov) Nifty50 has fallen more than 1.5% and Nifty Bank has gone down around 1%. So, it gets a little hard to decide whether to invest let alone deciding which sector to invest in.?

But below are some factors that I think Will help in the Banking sector’s outperformance:

• Upcoming Rate Cut: RBI MPC policy is coming with a rate cut probably in December so that’s gonna help move the liquidity in the banking sector again. Rate cuts almost always help the banking sector in the stock market.
• Valuation: In the last 8-12 months Banking sector has been in a consolidation phase which has made its valuation very discounted. You can buy good business a very reasonable rates. Canara Bank, Bank of Baroda, IDFC First Bank, Bank of Maharastra, J&K Bank etc are just some examples of undervalued firms with good PE and PB ratios.
• Global Market: If you look Globally Inflation has gripped the world and in this scenario, only the banking sector can trusted with growth. Markets fall so people would return to Banks for FD and RD-like schemes which means the Bank’s Business is gonna grow at double the rate.

Now, all these factors are gonna help in the Banking sector’s outperformance for the next 12-18 months. And now is the time to enter into the market when everything is trading at cheap rates.

Should You Invest in IDFC First Bank.?

After Bad Q2 numbers the stock has seen its new 52wk low. So should you Invest in IDFC First Bank.?

The short answer is – Yes You can think of investing in it. Long answer is it depends on multiple factors like:

Time Horizon: it’s not for the short term. IDFC first bank has an overhang of merger and then waits for its Q2 number. If you invest in it for 3-4 months you will get bored and it won’t do much in this time frame as the market itself is in the high-pressure zone.

Risk Averse: if you want less risk then this company might not be for you. It’s not like this stock has high risk but IDFC’s first bank share is still under pressure. This stock might not move for another few months so that must be kept in mind.

Market Pressure: The Stock market is under huge pressure so no one knows how much more it can fall. FII’s are selling and DII are avoiding this company altogether and with a merger, it’s gonna be in hibernation for a while. So understanding the scenario is important before making any investment.

Conclusion

At the end of the day, it’s your money and your decision. market is all about learning from the mistake. I have mentioned every possible factor that’s affecting its movement. so keep all these in mind.

-People Also Read These-

Small Traders in the Big Game: The Reality of Retail Participation in F&O Trading

What Should Investors Do in This Stock Market Crash 2024?