Development Credit Bank up 5%; Nomura says buy post Q1 nos

Moneycontrol Bureau

Development Credit Bank (DCB) shares rallied more than 5 percent Wednesday after the private sector lender reported good earnings.

Net interest income grew by 30 percent year-on-year to Rs 83 crore and net profit rose by 2.2 times Y-o-Y to Rs 43 crore during April-June quarter, but there was slight deterioration in the asset quality.

Gross non-performing asset (NPA) increased to 3.41 percent in first quarter versus 3.18 percent in previous quarter, but declined from 4.18 percent reported in a year ago period.

Net NPA jumped to 0.84 percent in the quarter gone by as against 0.75 percent each in previous quarter and in corresponding quarter of last fiscal.

Meanwhile, Nomura has a buy rating on the stock with a target price of Rs 60. "DCB continued its impressive run, with its twelfth consecutive quarter of 50 percent-plus year-on-year earnings growth," Numura report said.

Meanwhile, net interest margin of the lender was largely stable at 3.44 percent in June quarter FY13 versus 3.52 percent in March quarter and 3.18 percent in April-June quarter FY12.

Total deposits grew by 22 percent to Rs 8320 crore and advances rose by 19 percent to Rs 6471 crore for the quarter.

Retail deposits (which were 80 percent of total deposits) continued to provide a stable resource base to the bank while current account and saving account (CASA) was lower at 27.5 percent versus 30 percent Y-o-Y.

At 11:45 hours IST, the stock was quoting at Rs 52.30, up 5.23 percent amid high volumes on the BSE.