DCB Bank's Q1FY16 results were in- line with estimates as the earnings grew by 5% YoY (-26% QoQ) to Rs 469 mn mainly led by higher non-interest income which was set- off by higher than expected provision expenses. NII growth remained flat YoY (adj NII growth at 29% YoY) (8% QoQ) to Rs 1.4 bn. Advances grew by 25.7% YoY (flat QoQ) whereas NIMs improved marginally to 3.81%. Asset quality surprised negatively as GNPA and NNPA increased to 1.96% and 1.22% vs 1.76% and 1.01% in the previous quarter. We reduce our advances growth target as well as NIM estimate going ahead. We expect some near term challenges in the bank and rate the stock as Hold based on the recent price movement with a price target of Rs142 (2.1x FY17E ABV).