DCB Bank Ltd. share price target

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...

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...

DCB bank's 3QFY20 earnings demonstrated sequentially lower provisioning expenses (1.0bn v/s 1.47n in 3QFY21) and net profit of 779mn; down by 19% sequentially. The headline PCR decreased sequentially to 6.4% as fresh slippages remained high. Pursuant to the Supreme...

DCBB reported a weak operating performance, impacted by higher interest reversals, even as provisions fell sequentially, which supported earnings. Business growth continues to remain under pressure. The management guided for loan growth to remain subdued over the next few quarters due to the surge in COVID-19 cases and lockdowns in key states. Asset quality deteriorated further, with a rise in GNPA/NNPA ratio from pro forma levels in Dec'20. The gross restructuring book stood at 4.3% of loans (higher than peers). Collection efficiency, which improved in Mar'21, has...

MSME segment to propel growth; salaried class to keep asset quality in control DCB Bank's 9MFY21 performance demonstrated higher provisioning expenses (3445mn v/s 1429mn in 9MFY20) and net profit of 2579mn; down by 4.2% YoY. The lower profitability has resulted in PCR improvement to 84.3% v/s 72% a year ago. In 9MFY21, the bank's total slippages remains low (187mn v/s 5131mn in 9MFY20), moderate write-offs (743mn v/s 1202mn in 9MFY20) and standstill asset classification have resulted in GNPA ratio reduction (1.96% v/s 2.15% in the year ago) and decline in NNPA ratio (0.59% v/s 1.03%). On the business front, the bank reported marginal growth in net advances (1.7% YoY) and lackluster deposit traction of -2.9% YoY....

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of 294bn and advances of 250bn at the end of 1QFY21, 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 21%, Mortgages...

DCB Bank has posted mixed set of numbers overall for Q3FY21 with stable margins and controlled opex. However, asset quality has weakened, with increase in restructuring guidance and elevated credit cost expected. On the collection front, the bank has seen improving trend in each segment of the portfolio, collection efficiency for LAP, home loans and CV segment were at 89.8%, 94.1% and 80.4%, respectively. There has been healthy reduction in the quantum of customer pool that did not pay single EMI. In LAP business, this quantum reduced significantly from 7.4% in October 2020...

DCB Bank's (DCBB) Q3FY21 PAT of ~Rs 1bn beat estimates on higher treasury income and contained opex.

Background: DCB Bank Limited (formerly Development Credit Bank Limited) has a deposit base of 294bn and advances of 250bn at the end of 1QFY21, 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%, Mortgages...