With Kotak and Hdfc Bank available at high teens PE, there doesn’t seem to be any case for PE re-rating for IDFC First Bank.
In such a scenario returns can’t be much more than their ROE, which is just 10% during the last 2 years where banking NPAs were the lowest. Maybe ROE reaches 13-14% in medium term.
It doesn’t seem like any management can change the above facts even Mr. Vaidyanathan.
Dis – ex IDFC Ltd investor
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