Motilal Oswal's research report on DCB Bank
DCB Bank (DCBB) reported 3.5% YoY decline in PAT to INR1.3b (7% miss) in 1QFY25, due to lower net interest income and higher opex.NII grew 5.5% YoY to INR4.97b (6% miss). NIMs moderated 23bp QoQ to 3.39%, affected by interest reversals (due to regulatory changes) and the replacement of penal interest with penal charges. Advances grew 19% YoY/3.1% QoQ, supported by healthy growth in mortgages and gold loans. Deposits rose 20.2% YoY/4.7% QoQ, led by growth in term deposits. CASA mix moderated 62bp QoQ to 25.4%.Fresh slippages increased to INR3.72b (vs. INR3.22b in 4QFY24) due to higher slippages in mortgages. GNPA/NNPA ratios increased by 10bp/7bp QoQ to 3.33%/1.18%.We cut our earnings estimates by 4.3%/3.8% for FY25/FY26. We estimate FY26 RoA/RoE at 0.93%/13.3%. Reiterate Buy with a TP of INR175 (based on 1x FY26E ABV).
Outlook
We cut our earnings estimates by 4.3%/3.8% for FY25/FY26. We estimate FY26 RoA/RoE at 0.93%/13.3%. Reiterate Buy with a TP of INR175 (based on 1x FY26E ABV).
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