@manhar If IDFC first’s balance sheet grows by 25%, PAT will certainly grow at rate much more that 25% as operating leverage will kick in. There are several products that they have launched which are not yet profitable (eg. Credit cards business).
What management is guiding is ROA of 2%. Let’s assume that if that happens and their asset grows by 25% CAGR what you have stated.
FY22: Total assets 190,146
Est. FY25: Total assets 371,379
ROA of 2% will imply FY25 PAT of 7427 cr
Let’s assume that some dilution will happen and total share outstanding will go to 820cr. Even then, EPS would be 9.05.
If we take 30 PE (which I feel is higher), stock price will be around 271rs.
That would be 75% CAGR from current levels.
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