DCB Bank’s key products/revenue segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2024.
Financials
For the quarter ended 31-12-2024, the company has reported a Standalone Total Income of Rs 1855.10 crore, up 4.63% from last quarter Total Income of Rs 1773.04 crore and up 23.85% from last year same quarter Total Income of Rs 1497.82 crore. The bank has reported net profit after tax of Rs 151.44 crore in the latest quarter. Investment Rationale
With strong demand visibility in the target customer segment, DCB Bank remains well-poised to drive healthy growth. The management intends to align deposit growth with credit growth while maintaining a steady C-D Ratio. Axis Securities believes DCB is moving in the right direction in its journey to achieve an RoA of 1% by identifying NIM improvement levers, exercising stringent cost control and making efforts to improve productivity. No major asset quality challenges are visible; hence, slippages are expected to remain under control. Resultantly, credit costs are expected to range within the guided range of 45-55bps. Collectively, with these initiatives playing out, we expect DCB?s RoA to improve to ~1% by FY26-27E, with a RoA delivery of 13-14%. The current valuation is 0.7x Sep?26E ABV (Earlier Valuation: 0.7x Sep?26E ABV). The current target price is Rs 140/share (earlier target price: Rs 135/share). It has recommended BUY on reasonable valuations.
Promoter/FII Holdings
Promoters held 14.72 per cent stake in the company as of 31-Dec-2024, while FIIs owned 10.85 per cent, DIIs 27.89 per cent.
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