DCB can move to Rs 65: PN Vijay

DCB can move to Rs 65 in 12-15 months time, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "DCB is something which is on the plate of risky investors. HDFC Bank and the private banks will be a lot safer. DCB is a small urban Mumbai based private bank and the last quarter was just okay for them. They maintained their net interest margins slightly above 3, came in at 3.1."
He further added, "It is increasing its retail loan segment and trying to cut down pretty sharply on its corporate loans. That should improve its return on its loan assets. Also it has drastically reduced its dependence on high cost deposits and bulk deposits, which most banks are doing incidentally and that should I think lead to a pretty stable net interest margin above 3.1, probably around 3.2 in the coming quarters."
"DCB has had NPA problem. Their net NPA is slight above 1% and that is more because of the couple of bad corporate loans. When those get written off in the books, I think the NPA figure will improve. It has a price to book of about 1.4 on 13 earnings, which is I think the cheapest among the private banks compared to HDFC Bank for example which is more than 4. So we are talking about a bank at Rs 44 which is very cheap. As I said, it has got a high beta. It