DCB Bank Ltd. share price target

DCB Bank (DCBB) reported a mixed 3QFY22 as the miss on operating performance was offset by lower provisions, resulting in in-line earnings. NIMs improved sharply by 24bp QoQ to 3.61%. On the business front, advances grew ~3% QoQ, while deposit growth was modest at 1.5% QoQ. GNPAs increased 4% QoQ, while net NPAs declined 1.5% QoQ, as slippage stood elevated at INR4.57b (INR4.17b in 2QFY22). The o/s restructured book stood at INR18.8b (6.8% of loans). Collection efficiency remained...

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of 317bn and advances of 268bn at the end of 2QFY22, 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 - 11%, SME -10%, Agriculture 22%, Mortgages...

We initiate coverage with a BUY rating and a target price of Rs 115/share (0.8x FY24E ABV)

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of 306bn and advances of 254bn at the end of 1QFY22, 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 - 11%, SME -11%, Agriculture 22%, Mortgages...

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DCB Bank (DCBB) reported a weak operating performance, affected by higher slippage, sluggish NII growth, and elevated provisions. NIMs declined 15bp QoQ to 3.31%, impacted by high interest reversals and excess...

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of 297bn and advances of 259bn at the end of 4QFY21, 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 - 11%, SME -11%, Agriculture 22%, Mortgages...

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DCB Bank's (DCBB) Q4FY21 PAT of Rs 0.8bn (+13% YoY) beat our estimate on below-expected provisions.

DCB Bank posted moderation in operating performance due to interest reversals on NPA recognition, deterioration in asset quality on proforma basis and tepid business growth. Asset quality, on a proforma basis, deteriorated as GNPA ratio was up from 3.7% (proforma) to 4.09% QoQ while net NPA increased to 2.29% from 1.92% (proforma) QoQ. Restructured book, including those under implementation, were at ~| 1100 crore (4.2% of loans), below the management's earlier guidance of 5%. Recoveries were impacted during the...