IDFC First Bank vs Bandhan Bank Which Outperforms?

IDFC First Bank and Bandhan Bank are two prominent players in the Indian banking sector. IDFC First Bank was formed in 2018 as a result of a merger between IDFC Bank and Capital First. It offers a wide range of banking and financial services to its customers. Bandhan Bank, on the other hand, is a private sector bank that primarily focuses on serving underserved and underbanked segments of society. Both banks have shown strong growth potential in recent years, making their stocks a lucrative investment option for investors seeking exposure to the Indian banking industry.

IDFC First Bank or Bandhan Bank?

When comparing IDFC First Bank and Bandhan Bank, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between IDFC First Bank and Bandhan Bank.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. IDFC First Bank has a dividend yield of -%, while Bandhan Bank has a dividend yield of 0.88%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. IDFC First Bank reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Bandhan Bank reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with IDFC First Bank P/E ratio at 20.97 and Bandhan Bank's P/E ratio at 9.81. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. IDFC First Bank P/B ratio is 1.31 while Bandhan Bank's P/B ratio is 1.15.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, IDFC First Bank has seen a 5-year revenue growth of 3.12%, while Bandhan Bank's is 1.80%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IDFC First Bank's ROE at 7.11% and Bandhan Bank's ROE at 12.61%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹63.07 for IDFC First Bank and ₹165.61 for Bandhan Bank. Over the past year, IDFC First Bank's prices ranged from ₹59.30 to ₹92.45, with a yearly change of 55.90%. Bandhan Bank's prices fluctuated between ₹162.80 and ₹263.10, with a yearly change of 61.61%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.