IDBI Bank shares soar 14% to hit one-year high; will this strong up move continue?

IDBI Bank share price: The stock jumped 13.78 per cent to hit a one-year high of Rs 86.97. At this price, the scrip has ascended by 50.70 per cent from its 52-week low of Rs 42.88, a level seen on March 28 last year.

SUMMARY

In Q3 FY24, the bank’s interest income improved to Rs 6,541 crore.
The gross non-performing asset (NPA) ratio also improved to 4.69 per cent.
On the technical setup, support on the counter could be seen at Rs 75.

Shares of IDBI Bank Ltd witnessed a significant surge during the late trading session on Wednesday. The stock soared by 13.78 percent, reaching a one-year pinnacle at Rs 86.97. At this valuation, the scrip has experienced a notable ascent of 50.70 percent from its 52-week nadir of Rs 42.88, registered on March 28 last year.

The financial institution has reported a robust 57 percent growth in its net profit, totaling Rs 1,458 crore, for the third quarter concluding on December 31, 2023. This surge is attributed to diminished provisioning and enhanced interest income. In the corresponding period of Q3 FY23, the bank’s net profit stood at Rs 927 crore.

During Q3 FY24, the bank’s interest income showed improvement, reaching Rs 6,541 crore compared to Rs 5,231 crore in the analogous period of the preceding fiscal year. Additionally, the gross non-performing asset (NPA) ratio exhibited improvement, reducing to 4.69 percent as of December 31, 2023, from 13.82 percent in Q3 FY23.

From a technical standpoint, there appears to be support on the counter at Rs 75. A decisive closure above Rs 85 is deemed necessary for a sustained upward trajectory. Notably, an analyst has advised profit-taking at the current levels.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, remarked, “One can anticipate a further ascent in the upcoming days, with target levels of Rs 85-91 in sight.”

AR Ramachandran from Tips2trades stated, “IDBI Bank stock price exhibits bullish tendencies but is also overbought on daily charts, with the next resistance anticipated at Rs 87.7. Investors are advised to secure profits at the current levels.”

Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, commented, “Support is expected at Rs 75, while resistance lies at Rs 85. A conclusive closure above the Rs 85 level may trigger an additional upside towards Rs 90.”

DRS Finvest founder Ravi Singh expressed, “Immediate resistance is identified at Rs 85, and a conclusive close above this level is imperative for further advancement. Support is anticipated at Rs 77.”

As of December, the government and Life Insurance Corporation of India (LIC) collectively held a majority stake of 94.71 percent in the financial institution.