ICICI Securities's research report on DCB Bank
DCB Bank (DCB) hosted its maiden analyst day. The bank intends to remain focused on the underserved MSME segment through secured and granular loan offerings. However, it seeks to move up to the INR 30–100mn MSME segment and sharpen its focus on overdraft (OD) to ward-off competition from NBFCs and HFCs (both cumulatively account for ~44% of its balance transfer outs). DCB seems to be having a large under-penetrated existing customer base with low product per customer. The bank aims to accelerate its journey towards ‘full-fledged bank’ to improve customer stickiness/retention, and a better fee/float profile. To achieve the same, DCB has unified its cross-sell engine, improved training for RM, re-aligned incentives/scorecard and has been leveraging technology. Maintain BUY.
Outlook
We raise our TP to INR 225 (vs. INR 180), basis ~1.1x FY27E ABV (~0.9x earlier).
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