Motilal Oswal's research report on DCB Bank
DCB Bank (DCBB) has been delivering healthy loan growth and has guided for a steady growth rate of 18-20% over the coming years. The bank continues to focus on granular retail loans with a retail mix (ex-Agri) at 65% of the total portfolio. NIMs improved 3bp QoQ to 3.23% in 2QFY26, aided by a reduction in deposit costs. NIMs are expected to improve gradually, supported by lower funding costs and limited yield compression, though further rate cuts remain a factor to watch out for. With healthy business growth, operating leverage and margin improvement, we expect DCBB to report steady traction in the balance sheet and earnings growth.
Outlook
The valuations remain attractive at 0.8x FY27E ABV for a potential RoA of ~1% and ~24% earnings CAGR estimated over FY26-28E. We reiterate our BUY rating with a revised TP of INR210 (premised on 1.0x FY27E ABV).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
