The 29 reports from 12 analysts offering long term price targets
for DCB Bank Ltd. have an average target of 137.78. The consensus estimate
represents an upside of 72.33%
from the last price of 79.95.
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% in 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 eases and the economy returns to normalcy. GNPA's increase - upgrades delayed On a QOQ basis GNPA'S registered an increase of INR 795 mn as upgrades were affected by the lockdown. Within GNPA's the highest...
Loan growth slows to single digits; Asset quality remains under pressure DCB reported a lackluster quarter with increased stress on asset quality, tepid loan growth and elevated provisions due to Covid-19. The only solace was the continued control over opex. oAdvances growth stood at 8% YoY (a multi-year low) & remained flat QoQ with advances at Rs. 25,345 Cr. Loan growth trended down owing to a slowdown in all segments viz. Mortgage, SME, CV, Agri and Corporate. Loan book ex-corporate grew by ~10% YoY. We expect advances to grow at 10% CAGR during FY20-22E. oNIMs declined QoQ by 7 bps to 3.64%. (YoY NIM was at 3.78%). NII grew by 8% YoY. LCR has been in excess of 130% which has impacted NIMs by 4-5 bps. NIMs are expected to be negatively impacted in FY21E as the bank will look to maintain excess liquidity and also due to higher slippages. oOther income increased by 11% YoY. Fee income grew by a mere 2% while treasury income and forex transactions led to the overall increase in other income. oOpex grew 3% YoY and cost/income declined 330 bps QoQ and 260 bps YoY to 51.1%. DCB is confident of maintaining its opex levels low in the current year. oTotal Income grew by 8%. oProvisions stood at Rs. 118 Cr vs QoQ Rs. 59 Cr and YoY Rs. 35 Cr. Out of this, Rs. 63 Cr (0.95% of AUM) provisions were towards Covid (including Rs. 9 Cr as 10% provisions on overdue accounts as on 1st March as prescribed...
Expect de-growth in 1HFY21, NPA challenges inevitable DCB Bank (DBL) reported NII 2% below our estimate. Operating profit growth was relatively better at 14.5% YoY/11.7% QoQ on the back of a flexible cost structure (as indicated by the management). Total opex grew by 3.1% YoY and declined by 2.1% QoQ. Provisions for the quarter stood at Rs1,182mn, up 2.4x YoY/1x QoQ as the bank provided a sum of Rs630mn related to covid-19. Going forward, we expect credit cost to increase on account of NPA build up. PAT came in 32% lower than our estimate mainly on account of higher-than-expected provisioning. Advances growth at 7.5% YoY was weak as Rs4-5bn worth of loans could not be...
DCB Bank reported an operationally steady quarter but with higher provision at | 63 crore related to Covid impacted earnings. Provision surged 240% YoY to | 118 crore, including Covid related provisioning of | 63 crore vs. RBI requirement of | 9 crore. The bank has maintained additional floating...
Valuation and Outlook DCB has surpassed its inflection point in terms of a gradual and continuous reduction in its cost to income ratio as the benefit of over 2x increase in branches post FY15 becomes visible. Although the economic slowdown and run-down of corporate book shall impact the bank during FY20, we remain positive from FY21 perspective, given DCB's strong presence in the SME and Retail space with no baggage of any legacy asset quality issues. As compared to its peer City Union Bank (CUB), DCB trades at a discount of 40% due to its lower historical ROA of 0.9-1.0% as against 1.6% for CUB. We believe this discount should shrink to 25% as DCB's ROA expands to ~1.2% by FY21E majorly backed by a decline in opex/assets. We maintain BUY on the stock with a target price of Rs. 219 (at 1.8x of FY21E Adj. BV).
Our estimates remain largely unchanged, even after DCBB's soft performance over 3QFY20. We model a considerable improvement in credit growth and operating efficiency beyond FY20E. These reflect our confidence in the bank's calibrated approach to growth. We expect oplev to be the biggest driver of return ratio improvement. DCBB stands to gain from an uptick in economic activity and a sustained downturn will pose a significant risk to our estimates. DCBB reported an in-line qtr and overall performance was lackluster (asset quality deterioration and slowing growth). Better cost control and a slight margin uptick were positives. MAINTAIN BUY with a TP of Rs 249.
Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 297bn and advances of INR 254bn at the end of 3QFY20, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15% stake. DCB services entail Corporate Banking - 12%, SME -11%, Agriculture 21%,...
DCB Bank's net advances growth moderated further to 11% vs 12% sequentially. NII grew by 10% YoY while PAT grew by 12% YoY led by lower tax rate (26% vs 35% YoY). Loan growth ex-corporate segment is ~15% (16% in Q2FY20) vs. overall growth of 11%. Cost-toincome ratio on a QoQ basis has declined by 85bps on account of stable Opex sequentially. Fresh slippages continue to remain high at 2.01bn up 25% QoQ led by Corporate and CV...
DCB Bank (DBL) reported 3QFY20 results with the key pointers being: (1) Loan growth weakened further; we revise full year estimate downward (2) Asset quality dampened by corporate and CV slippages (3) NIMs have held up well; meaningful expansion unlikely from current levels (See detailed conference call takeaways on page 2 for significant incremental colour). Per se, on the key P&L; items, DBL posted NII growth of 10% YoY at Rs3,231mn, PPOP growth of 9% YoY at Rs1,899mn and PAT growth of 12% YoY at Rs967mn. We have revised our estimates for FY20/FY21/FY22 and retained Accumulate rating (neutral stance) on DBL, revising our target price to Rs187 (from Rs200 earlier) and valuing the stock at 1.4x H1FY22E P/BV....
25 January 2020 DCBB reported in-line 3QFY20 operating performance, while higher provisions dragged earnings growth (5% miss), led by greater stress in a few business segments. Loan growth moderated further on continued sluggishness in the corporate banking portfolio. Maintain DCBB reported PAT of INR967m (5% miss), impacted by lower treasury gains and higher provisions (36% QoQ increase). NII growth slowed to 10% YoY to INR3.2b (in-line) due to moderation in loan growth (11% YoY) while margins improved 4bp QoQ to 3.71%, aided by reduction in cost of deposits. Other income declined 1.5% YoY (8% QoQ decline), mainly led by muted treasury gains of INR70m (72% QoQ decline), while core fee growth was also subdued at 5% YoY. Loan growth moderated further to 11% YoY, primarily led by continued sluggishness in the corporate banking portfolio; it now forms 12% of the book (v/s 15% in 3QFY19).
Sector: Banking /Mid-Cap | Earnings Update 2QFY20 Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 293bn and advances of INR 248bn at the end of 2QFY20, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15% stake. DCB services entail Corporate Banking - 12%, SME -12%, Agriculture 20%, Mortgages 41%....
DCB Bank's net advances growth moderated further to 12% vs 13% sequentially. NII grew by 11% YoY while PAT grew by 24% YoY led by higher other income (up 38% YoY). Loan growth ex-corporate segment is ~16% (19% in Q1FY20) vs. overall growth of 12%. Cost-to-income ratio on a QoQ basis has declined by 195bps on account of stable Opex sequentially. Fresh slippages continue to remain high at 1.6bn up 10% QoQ led by Mortgages/SME and CV portfolio. We maintain ACCUMULATE rating with a new TP of...
A Weak Quarter; Performance Likely to Improve in 2HFY20 DCB Bank has delivered a weak performance in 2QFY20 led by elevated annualised slippages of 2.7% along with continued pressure on NIM (-25bps YoY) and weak loan growth (+12% YoY). PAT grew by 13% YoY (marginally ahead of our estimate), largely aided by higher treasury gains. Gross NPAs increased by 13bps QoQ and 25bps YoY, with rise in segmental NPAs across CV, MSME, mortgage and gold portfolio. CASA grew by a muted 7% YoY, though growth in retail deposits stood at healthy 26% YoY. The Management's endeavor to further granularise its deposit profile should aid the Bank's NIM over the longer-term. We believe unless the advances...
NII came in line with our estimates at ~| 313 crore, up ~11% YoY, on the back of lower credit growth & steady margin sequentially. Other income growth came in higher than our expectation at ~38% YoY to ~| 101 crore led by multifold growth in trading income & steady growth of 6% QoQ in CEB book, which was at ~| 58 crore in Q2FY20 (~| 55 crore in Q2FY20). Accordingly, operating profit was at | 185 crore, up 26% YoY. Provision continued to remain elevated at | 43 crore, up 36% YoY. The bank also revalued deferred tax asset during the quarter leading to additional...
Yet again, we are compelled to reduce our estimates for DCBB over FY20-22E, as we build slower loan growth and higher slippages. These do not worry us and we like DCBB's relatively conservative approach. Sustainability of oplev improvement seen this qtr (key for RoAA expansion) and the NIM impact of linking of fresh retail loans to external benchmarks, will be watched for. Maintain BUY with a TP of Rs 243 (2 X Sep-21E ABV of Rs 122), especially given the recent correction. DCBBs 2QFY20 disappointed with broad-based asset quality deterioration while sustained cost control and stable margins were silver linings. MAINTAIN BUY with a TP of Rs 243.
Sector: Banking /Mid-Cap | Earnings Update 1QFY20 Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 287bn and advances of INR 241bn at the end of 1QFY20, making it the smallest bank in the listed private sector space, including both new and old generation private sector banks. Promoter group the Aga Khan Fund for Economic Development (AKFED) & Platinum Jubilee Investments holds ~15% stake. DCB services entails Corporate Banking - 13%, SME -12%, Agriculture 20%, Mortgages ...
DCB's Q1FY20 numbers have overall come in weak and quite below our expectation. NII and PAT growth remained sluggish at 11.5/16.5% YoY vs. our expectation of +15/+24%. Loan growth ex-corporate segment is ~19% vs. overall growth of 13%. Interest expenses were a drag on the topline due to fixed rate refinance being garnered from NABARD and SIDBI. Cost-to-income ratio on a QoQ basis has increased by 370bps on account of salary hikes given. Over FY17-19, loan growth ex-corporate segment has been at 21%-27% which the management now expects at Q1 level of ~19% for FY20. Further, management has also highlighted risk of increased corporate slippages in the...
