If You Invested In IDFC Bank Shares Instead Of Its FD Last Year, Here's How Much You'd Have Today

IDFC First Bank‘s share price has been enjoying a golden run over the last few months. Shares of the bank went up close to 1% to hit a new 52-week high of ₹70.50.

Shares of the private lender have been upbeat since it posted its earnings for the March quarter. Its net interest income, a key profitability metric for banks, stood at ₹3,597 crore, representing a 35% increase from the year-ago period.

In another promising sign, the lender recorded its highest-ever quarterly profit in the March quarter at ₹803 crore, significantly more than the ₹343 crore profit it made in the same quarter of 2022.

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These strong numbers also received positive reactions from brokerages across the board. Global brokerage firm CLSA maintained its ‘buy’ rating for the stock with a price target of ₹80. Domestic brokerage firms ICICI Direct and Motilal Oswal also maintained the ‘buy’ rating for the stock with a price target of ₹75.

Now, let’s delve into the question of whether investing in IDFC First Bank’s shares would have yielded more returns than investing in its Fixed Deposit (FD) last year.

IDFC First Bank offers competitive interest rates on its FDs, with a one-year FD yielding a return of 6.75%. Thus, if you invested ₹10,000 in IDFC First Bank’s FD last year, your investment would have matured to approximately ₹10,675.

However, if you had chosen to invest ₹10,000 in IDFC First Bank shares when it closed at ₹36.45 on May 30, 2022, you would have been able to purchase approximately 274 shares. Given the current price at the ₹70 levels, those shares would now be worth around ₹19,180. That represents a remarkable return of approximately 92% on your initial investment, significantly outperforming the return from the FD.

Price Action: IDFC First Bank's share price was up 3.66% to trade at ₹63.70 in the early hours of trading on Tuesday.

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Disclaimer: Benzinga India doesn't give financial advice. The above article is for educational purposes alone.

Editor's Note: Artificial intelligence was used as a secondary aid in the writing of this story.