DCB Bank Ltd. share price target

DCBB reported a strong earnings performance led by a strong core earnings performance and a softer than expected provisioning. The operating expenses were in-line with estimates. Secular expansion in NIMs continued and was aided by a sharper improvement in yield on advances compared to cost of deposits. DCBB closed the year with a strong 18.5% YoY growth in business with both advances and deposits maintaining a close momentum.

We maintain our BUY recommendation on the stock.

DCB Bank (DCB) has reported a strong quarter with Q4FY23 PAT at Rs1.42bn (up ~25% QoQ) driven by healthy business growth, NIMs uptick QoQ, improvement in cost to income and negative net slippages. RoA annualised inched up further to 1.1% (vs 0.94% QoQ).

Recommendation: We recommend a BUY rating on the stock with a TP of Rs 116, implying an upside of 10% from CMP.

The stock currently trades at attractive valuations of 0.7x Sep'24E ABV and we value the stock at 1x Sep'24E ABV to arrive at a target price of Rs 150/share, implying an upside of 32% from CMP. We re-iterate a BUY recommendation on the stock.

DCB Bank’s (DCB) Q3FY23 financial performance is characterised by steady improvement in core operating performance and continued moderation in fresh slippages. Strong credit growth at 21% YoY and 41bps YoY.

DCB Bank’s (DCB) Q2FY23 financial performance has been characterised by improvement in core operating performance as reflected in its strong 10% QoQ NII growth, 19% QoQ growth in core fee income, steady decline in NPL ratio and improved visibility in credit growth acceleration in coming quarters.