DCB Bank Ltd. share price target

DCB Bank reported 10.5% yoy and 68.9% qoq increase in PAT at Rs695mn, driven by lower effective tax rate (0.3% 4QFY16 v/s 34.9% in 3QFY16) along with higher operating income (30.8% yoy and 10.8% qoq growth). Overall, business growth improved during 4Q as credit grew 23.5% yoy / 10.1% qoq and deposits moved up 18.4% yoy and 6% qoq. NIM remain stable at 3.94% in 4Q v/s 3.96% in 3QFY16 led by decline in CoF. Strong business growth along with healthy NIM resulted into 30.1% yoy and 5.1% qoq growth in NII to Rs1.7bn. The bank has now toned down its growth strategy and thus will have relatively lower impact on return ratios....

Background: DCB Bank Limited (formerly Development Credit Bank Limited) is the smallest listed private sector lender with a total asset base of INR 176bn as of 3QFY16 DCB has a deposit base of INR 141bn and advances of INR 117bn at the end 3QFY16, 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 ~16.3% stake. DCB services entails, corporate banking - 17%, SME -12%, Agriculture 17%,...

Key highlights: NII growth was aided by high loan book growth and improvement in NIM. Loan growth was primarily driven by retail segment (+36% yoy), while corporate loans declined 11% yoy.Despite adding 17 branches in Q3, opex growth was controlled at 22%....

After an expansion plan announcement in the last quarter that spooked investors, DCB Bank?s 3QFY16 beat expectations. Improved NIM, contained C-I ratio, lower slippages and strong loan growth resulted in net earnings growth of 11.6% QoQ. DCBB added 16 branches and 24 ATMs during the quarter.

DCB Bank reported 11.6% qoq increase in PAT at Rs412mn, driven by higher operating income along with lower provision expenses. Overall, business growth improved during 3Q as credit grew 23.7% yoy / 5% qoq and deposits moved up 21.5% yoy and 3.9% qoq. NIM increased to 3.96% in 3Q v/s 3.79% in 2QFY16 due to decline in CoF. Strong business growth along with healthy NIM resulted into 31.6% yoy and 7% qoq growth in NII to Rs1.6bn. The bank has now toned down its growth strategy and thus will have relatively lower impact on return ratios. We remain cautious on DCB's operational performance due to change in business...

PAT was below expectation due higher operating expenses and provision. NII growth wasstrong,assetqualitystable,andprovisioncoverageincreased. Concerned about the changing competitive landscape, management resorted to...

DCB Bank reported 10.1% yoy and 21.2% qoq decline in PAT at Rs369mn, which was below our estimate, due to higher operating and provision expenses. On the other hand, the bank has surprised us by making material changes in its growth strategy. DCB has announced that it would double its branch network from current 160 branches to 300 branches by December 2016. This target is way above the earlier guidance of opening 25-30 new branches every year. In order to support the...