New Delhi, Sept. 23 -- Motilal Oswal Financial Services (MOFSL) has upgraded IDFC First Bank to Buy from Neutral, with a target price of Rs.105, implying a potential 23% upside from its last closing price of Rs.85. The brokerage cited the bank's stronger deposit franchise, sustained loan growth, improving operating leverage and controlled credit costs as key reasons behind the upgrade.

MOFSL said the bank had made significant progress in strengthening its deposit franchise while continuing to grow its loan book and de-risk its balance sheet. The brokerage expects these improvements to support a recovery in profitability. It stated that the upgrade was based on a target valuation of 1.6 times FY28E adjusted book value (ABV).

"The bank is...