InvestorQ : should i buy idfc, a friend is saying... Idfc bank 10 yr target is...450-550... current price: 42. suggest me.
Mohit Saini made post

should i buy idfc, a friend is saying... Idfc bank 10 yr target is...450-550... current price: 42. suggest me.

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Dilmini Mercia answered.
1 year ago


To be honest, it is very difficult to predict what can happen after 10 years in an Indian market where things are changing drastically on a weekly basis. Instead of looking at 10-year targets, your approach should be to look at quality stocks and buy at a reasonable price. As of now, the banks have a legacy of bad assets and most of its future plans are still on paper. It is entering a market where large names like HDFC, HDFC Bank, ICICI Bank, Axis, SBI, and Kotak are all very well entrenched.

When you are talking of a 10 bagger in 10 years, you are talking about an annual stock price growth of nearly 27%. To earn that kind of stock market returns, the company profits and revenues need to grow at 30-40% on an annualized basis. I am not sure if the company currently has that kind of visibility. Buy into the company closer to when there are indications of such future growth.