DCB Bank Ltd. share price target

Deposits for the bank stood at Rs. 26,169 cr registering robust growth of 27% YoY and 5% QoQ. The CASA portion for the bank stood at Rs. 6358.7 cr rising by 19% YoY and 3% QoQ. CASA ratio stood at 24.3% vs. 24.6% YoY. Retail term deposits stood at...

ICICI Securities Ltd | Retail Equity Research DCB Bank reported a stable set of numbers with margins coming in a bit lower. NII came in at | 282 crore against | 248 crore, rising 17% YoY. NIM came in at 3.83% vs. 3.91% in Q1FY19 (lowest in the last four quarters). It continues to be impacted by yield pressure in...

Loan growth is healthy at 27% YoY is driven by granular segments. NII growth of 14% YoY (in line with our expectations) accounts for 7bps sequential and 39bps YoY compression in NIMs. Improvement in operational efficiency and lower provisions has partly offset impact of NIM compression and dip in treasury profits. PAT has grown by 25% YoY (5% below expectations). Asset quality has been stable and has been one of the best among mid cap banks. We retain our BUY rating with a TP of Rs210 valuing the...

Maintain BUY with a TP of 209 (2x Sept-20E ABV of Rs 104). DCBBs 2Q results were impressive, particularly, the stable asset quality (esp. in the mortgage business) on account of lower slippages, sustained business momentum (+27%), controlled costs (core C-I improved ~360bps) and further decline in provisions (even as PCR inched up). RWA remained constant even as the loan book grew 4% QoQ. While the CASA ratio dipped QoQ, 30% SA growth was promising.

17 October 2018 DCBB reported in-line PAT of INR734m, driven by moderation in opex and provisions. PPoP growth of 17 % YoY came in below our estimate due to a 12 % decline in other income. NIM shrank by 7bp YoY due to a 14bp decline in yield on advances. Our full-year estimate suggests DCBB should deliver PAT of INR1.5b in 2HFY19 (after INR1.4b in 1HFY19). Strong growth in AIB (+42 %), MSME (+27 %) and Corporate (+12 %) books led to 4 %/27 % QoQ/YoY growth in the loan book to INR220.7b. Other smaller categories such as CV (+78 %), Gold (+27 %) and Construction Finance (+27 %) also exhibited strong growth, while Mortgages grew at a marginally slower rate of 21 % YoY. Deposits grew by 27 % YoY (+4.5 % QoQ) to INR261.7b. Opex declined 11 % YoY to INR2.1b, largely due to the reduced pace of branch addition, leading to a decline in the C/I ratio to 59 %.

We retain BUY on DCB Bank (DCBB) with TP at Rs205. Q2'19 results were strong on many counts robust loan growth, healthy core operating profit, limited slippages and higher than expected NII / PAT. NIM (reported) declined 7bps QoQ; we expect trend in NIM to reverse in H2FY19. Cost / asset ratio declined further to 2.6% (vs. 2.9% for FY18) and re-affirms our thesis of improved branch productivity. Continued traction will aid in increased profitability. Capital position remains strong;...

Under the leadership of Mr. Natrajan heading since FY10, the bank reinvented its business model with greater emphasis on retail banking. The Focus shifted towards secured and granular business. Bank chose to create a niche in self-employed segment, which has relatively limited competition enabling the bank to improve its NIMs significantly. With branch network already doubled over the last three years, the management is targeting strong improvement in operational efficiency. We are factoring next two years CAGR loan growth of 25%, PAT growth of 31% and...

DCB Bank reported a mixed set of numbers. NIM came in at 3.9% (lowest in last four quarters). It was impacted by yield pressure in corporate & mortgage portfolio and also owing to a rise in slippages to | 107 crore in Q1FY19 vs. earlier trajectory of ~| 80 crore GNPA ratio increased to 1.86% vs. 1.79% QoQ while NNPA ratio was flat at 0.72%. PCR was at 76.1% vs. 75.7% in Q4FY18. Higher slippages came as a negative surprise. Loans continued to increase at a strong pace of 31% YoY to | 21243...

DCB Bank has posted Rs695mn net profit (+6.5% YoY & +8.2% QoQ) in 1QFY19, marginally above our estimates of Rs654mn. Higher NII (+17.1% YoY & +3.5% QoQ) led by continued strong growth in loan book (+30.6% YoY & 4.5% QoQ) and lower provisioning expenses at Rs332mn (-6.4% YoY & -14.4% QoQ) aided bottom-line growth. However, operating profit growth moderated to 3.6% YoY to Rs1.41bn owing to lower treasury income and relatively higher opex. Fresh slippages also sequentially increased to Rs1,074mn vs. Rs814mn in 4QFY18 and Rs887mn in 1QFY18. Headline gross NPA number rose by 8.6% QoQ due to higher quarterly slippages. Notably, its overall stressed loan portfolio remained stable and within the Management's comfort zone....

Sector: Banking /Mid-Cap | Earnings Update 1QFY19 Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of INR 240 bn and advances of INR 203 bn at the end 4QFY18, 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 - 17%, SME -12%, Agriculture 18%, Mortgages ...