In its analyst meet DCB Bank unveiled its aspiration to become a “FullService Banker” from being merely a “Lender or Service Provider”, without altering its fundamentals and further strengthening and effectively leveraging its core capabilities.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Axis Securities Report
DCB Bank Ltd. remains well-positioned to deliver its aspirational RoA of 1% by FY27, supported by-
improving NIMs,
a strengthening fee income profile,
gradual moderation in the opex ratio, driven by improved efficiency and productivity, and
range-bound credit costs.
We expect DCB’s RoA/RoE to improve to 1%/14-15% over FY27-28E, compared with 0.9%/12.2% in FY26. We temper down our growth estimates marginally, resulting in a 1-2% cut in our NII estimates over FY26-28E.
The lower-than-expected improvement in Opex ratios is largely offset by the benign credit costs. However, we lower our EPS estimates by 2-4% over FY26-28E.
The stock has seen a sharp run-up post Q2 results with strong visibility on 1% RoA delivery, resulting in valuation catch-up. Sustained strong performance across key operating metrics and push to further improve RoA beyond 1%, closer to its closest peers, driven by improved operational efficiency and better-than-expected performance on NIMs, should drive further stock performance.
We value the stock at 0.95x FY27E adjusted book value to arrive at a target price of Rs 200/share, implying an upside of 14% from the currenta market price.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
RECOMMENDED FOR YOU
SBI Enters $100-Billion Market-Cap Club
DCB Bank's NIM To Expand In Near-Term, CEO Praveen Kutty Says
Federal Bank Shares Gets Nirmal Bang's 'Buy' Upgrade; Target Price Hiked — Here's Why
ICICI Bank Remains Motilal Oswal's Preferred 'Buy' In The Sector Post Robust Q2 Results — Check Target Price
POPULAR