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IDBI Capital Report
DCB Bank Ltd.'s asset quality deteriorated slightly with gross non-performing asset at 3.4% versus 3.3% QoQ and net non-performing asset at 1.3% versus 1.2% QoQ.
Net restructured standard book further declined to Rs 12.7 billion versus 14.1 billion QoQ; remains high among the industry. Banks deposits growth remained strong at 23% YoY versus 19% YoY (FY23); credit growth too witnessed strong growth at 19% YoY versus 18% YoY (FY23).
Net interest income grew slowly by 1% QoQ led by decline in margins (down 14 basis points QoQ). Profit after tax remains flat QoQ led by higher provisions (up 5% QoQ).
Cost/income ratio remain high at 64% versus 64% QoQ led by higher other opex (up 6% QoQ).
DCB Bank reported collection efficiency for key portfolios (September 2023) – loan against property/home loans/commercial vehicle loans at 98.6%/98.7%/94% versus 97.2%/97.5%/88.6% (June 2023) respectively.
We maintain ‘Buy' rating with target price of Rs 150 valuing it at 0.9 times price/adjusted book value FY25E.
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