172@29@17@137!~!172@29@0@53!~!|news|business|stocks|accumulate-dcb-bank-target-of-rs-68-dolat-capital-5308941.html!~!|controller|infinite_scroll_article.php
Moneycontrol
Financial Freedom Offer: Subscribe to Moneycontrol Pro and grab benefits worth ₹15,000/-
Last Updated : May 25, 2020 09:40 PM IST | Source: Moneycontrol.com

Accumulate DCB Bank; target of Rs 68: Dolat Capital

Dolat Capital recommended accumulate rating on DCB Bank with a target price of Rs 68 in its research report dated May 23, 2020.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Dolat Capital's research report on DCB Bank


While PPoP growth at 15% YoY was in-line, lower PAT was driven by COVID related provisions of Rs0.6bn. Rise in GNPA ratio (+30 bps QoQ to 2.46%) was owing to lower write-offs and weak recoveries/upgrades. Even as CASA levels declined QoQ, the bank has been granularizing and gradually strengthening its liability profile, albeit at higher costs. While we like the Bank for its conservative lending approach, granular secured franchise, demonstrated ability to manage recoveries and improved capital consumption, interim growth and asset quality challenges along with weak recovery prospects could continue to weigh on its earnings profile. We consequently slash our RoA estimates to 0.4%/0.9% for FY21E/22E, factoring in the benefit of contingency buffers (Rs1.6bn) in FY21E credit costs.


Outlook


We maintain our ACCUMULATE recommendation on the stock with a TP of Rs68, valuing it at 0.7x of FY22E P/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.

First Published on May 25, 2020 09:40 pm
Sections