I think VV has a different game plan when building a Business which is not traditionally followed by most of others and hence not understood well or accepted Initially by the market.He did the same in Capital first.
His Style is build a sustainable model which is scalable for a long period.This model requires front loading of cost and it creates temporary depression in the profitability numbers.
This also creates doubts in the minds of many and the environment around is negative which I presume is the reason many leaders dont want to follow such models which creates lot of pressure for them.
The real product will only emerge later once the Model is built and ready to fly.

The Bank has completed the pain period and the journey has just began.The profitability numbers will surprise many since the Operating leverage has kicked in.We need 2-3 quarters of results for all to believe.
Interesting times ahead !

@Gurvinder_Singh @Ragnar_Danneskjold
I feel valuations is very subjective and every investor has a different style while valuing a company. In my opinion we should be valuing a company on bad to average future performance. If we value on the best possible assumptions then it is going to be kind of risky.

I mentioned in my last point that even if I am wrong at one part the other part will balance off. Like if I take a profit of 4500cr in FY25 then the money raised at 100rs has a probability of only 5%. So the total dilution instead of 820cr will be 1020cr at 50rs. So 4.41 EPS and PE of 30 gives a price of 130. Again I am taking 30 as PE.

Now if IDFC is growing at 2x compared to industry in future and we are going to expect it will maintain same asset quality even at such high growth then that is also going to be risky.

IDFC has a provision coverage of 73% including technical write off at IndusInd size it will need to take it above 80% this is also going to eat profits.

My point is that we should not be projecting linear growth especially in banks because there is always uncertainty in future and I feel as of today above 60 is expensive.

Now as new quarterly performance comes in and it is better than most of my assumptions then I can increase my targets accordingly.

I feel most of the assumptions taken by me are pretty good and chances of bank outperforming all of those looks difficult as of today.

With a bloated equity of 620 cr after IDFC merger, hiw do you see growth prospect in long-term, to me it looks a long long term.

Untill and unless the activity in this thread subsides the volatility in the stock price won’t subside. It’s only a matter of few weeks for the next quarter result. The market will start acknowledging the potential of a stock once the performance stabilises. Next quarter could be a watershed moment in the journey of idfc first.

I would agree on mostly everything else, but this. I think its ulta.
Market is being cautious about this stock, and only factoring in what has happened in last quarter. Market is playing it quarter to quarter.

Reason: Retail lending is a slippery slope. NPA can spike. Many a bank has taken a hit. List is long.

Lately, i have been observing the energy with which VV sir appears on LinkedIN videos, and conf speeches. Also a flag.