SPA Securities is bullish on DCB Bank has recommended buy rating on the stock with a target price of Rs 231 in its research report dated June 11, 2020.
SPA Securities' report on DCB Bank
DCB reported advance degrowth of 0.37% for Q4FY20 on a QOQ basis while deposits registered a QOQ growth of 2.14%, even though Q4 usually has historically been the strongest quarter for the bank. NIMS for the quarter stood at 3.64% against 3.71%bin Q3FY20. GNPA's stood at 2.46% against 2.20% in Q3FY20 while NNPA stood at 1.16% against 1.03% in Q3FY20. The provision coverage ratio was at 70.81% against 76.99% in Q3FY20. Advances growth to pick up pace from Q3FY21 as COVID induced pain.
Outlook
Currently the stock is trading at 0.5x p/b of FY22E ADBV of INR 142.2. We retain our buy recommendation with a target of INR 231 in 18 months based on 1.62x p/adbv of FY22E.
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