"90 percent of the retail book is backed by cash flow" says V. Vaidyanathan, Managing Director and CEO at IDFC FIRST Bank in its interaction with CNBC-TV18 on Tuesday. He further adds that it expects the loan growth to sustain at 22 to 24 percent and margins at 6.3 to 6.4 percent.

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IDFC First Bank its fourth quarter earnings declared on April 29th, reported a robust growth in advances across most segments. In housing loans, the disbursements are strong even with the rise in interest rates. Further the annual slippage ratio has declined to 2.7 percent versus 4.53 in same quarter of last year. Further, the Net Interest Margin (NIM) is at an all time high of 6.4 percent. The expansion in NIM and treasury gains led to a beat in the street expectations for profit after tax.

Vaidyanathan in his interaction with CNBC-TV18 says the NIM expansion can be attributed to the cut in deposit rates from 7 percent to 4 percent. He further adds that the key parameter to watch out for now is asset quality. The bank's risk weighted assets to advances is now at 111.5 percent.

CLSA has a buy rating on the stock and says the bank is well placed for growth. IDFC First Bank shares were trading 3.6 percent higher on the exchanges at 11:30am on Tuesday.

(Edited by : Vahishta Unwalla)