Shares of DCB Bank surged 10 percent to Rs 121 apiece on October 25 after the lender reported healthy July-September quarter (Q2FY25) results.
The bank reported a 22.6 percent year-on-year (YoY) increase in net profit to Rs 155.5 crore for Q2FY25, while net interest income (NII) grew 7 percent YoY to Rs 509.2 crore. On the asset quality front, net non-performing assets (NNPA) improved slightly to 1.17 percent in Q2FY25, compared to 1.18 percent in the previous quarter. Similarly, the gross non-performing assets (GNPA) ratio declined to 3.29 percent, down from 3.33 percent in Q1FY25.
“Our growth momentum remains strong across both deposits and advances,” said Praveen Kutty, Managing Director and CEO. “A greater focus on analytics and customer engagement is driving growth in fee income. Recoveries and upgrades have been encouraging, and we are actively working on enhancing productivity. Looking ahead, we anticipate steady improvement in profitability.”
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DCB Bank has 451 branches across 20 states and 2 union territories. It is a scheduled commercial bank regulated by the Reserve Bank of India.
Following its Q2 update, Kotak Institutional Equities maintained their 'buy' rating and kept target price unchanged at Rs 160 per share.
"The quarter had no new negative surprises on most operating ratios that we monitor. Cost of funds appears to have peaked, as it has remained unchanged for the past three quarters, while yields have shown a marginal decline, but is
less worrisome and not a sign of any intense competition on the ground. The slower growth in select high-yielding products has mostly led to this performance," the brokerage firm added.
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