Agencies has buy call on DCB Bank with a target price of Rs 130. The current market price of . is Rs 86.2. Time period given by analyst is one year when Ltd. price can reach defined target.
DCB Bank Ltd., incorporated in the year 1995, is a banking company (having a market cap of Rs 2690.43 Crore).
DCB Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 1041.69 Crore, up .67 % from last quarter Total Income of Rs 1034.71 Crore and up 7.87 % from last year same quarter Total Income of Rs 965.67 Crore. The bank reported net profit after tax of Rs 97.15 Crore in latest quarter.
Investment Rationale
DCB Bank’s (DCB) Q1FY23 result has to be seen in the context of seasonality. It utilised business seasonality to ramp-up infrastructure – it added >600 employees mainly for sales and opened five branches during Q1FY23. Since Sep’21, cumulatively, it added >1,850 employees and opened ~50 branches. Considering improved credit demand (disbursements up 2.5% QoQ) and investment towards growth infrastructure, it expects credit growth to improve going forward. Also, it plans to double its balance sheet in next 3-4 years. While fresh slippages remained elevated at Rs5.7bn (7.7% annualised), recoveries / upgrades equally remained robust at Rs5.7bn, resulting in GNPL falling to 4.2% vs 4.3% in Q4FY22. Due to net negative slippages, credit cost too settled lower at Rs350mn vs Rs676mn in Q4FY22. Bulk of slippages came from gold loan book. Management expects overall fresh slippages to normalise at pre-covid level over the next 2-3 quarters.
Promoter/FII Holdings
Promoters held 14.85 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.45 per cent, DIIs 37.62 per cent.
DCB Bank Ltd., incorporated in the year 1995, is a banking company (having a market cap of Rs 2690.43 Crore).
DCB Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 1041.69 Crore, up .67 % from last quarter Total Income of Rs 1034.71 Crore and up 7.87 % from last year same quarter Total Income of Rs 965.67 Crore. The bank reported net profit after tax of Rs 97.15 Crore in latest quarter.
Investment Rationale
DCB Bank’s (DCB) Q1FY23 result has to be seen in the context of seasonality. It utilised business seasonality to ramp-up infrastructure – it added >600 employees mainly for sales and opened five branches during Q1FY23. Since Sep’21, cumulatively, it added >1,850 employees and opened ~50 branches. Considering improved credit demand (disbursements up 2.5% QoQ) and investment towards growth infrastructure, it expects credit growth to improve going forward. Also, it plans to double its balance sheet in next 3-4 years. While fresh slippages remained elevated at Rs5.7bn (7.7% annualised), recoveries / upgrades equally remained robust at Rs5.7bn, resulting in GNPL falling to 4.2% vs 4.3% in Q4FY22. Due to net negative slippages, credit cost too settled lower at Rs350mn vs Rs676mn in Q4FY22. Bulk of slippages came from gold loan book. Management expects overall fresh slippages to normalise at pre-covid level over the next 2-3 quarters.
Promoter/FII Holdings
Promoters held 14.85 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.45 per cent, DIIs 37.62 per cent.
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