Anand Rathi's research report on DCB Bank
Higher margins and moderating credit cost led to a strong increase in profitability for DCB, with RoA at ~1.1%. Higher slippages kept asset quality under pressure. Key positives for the quarter were 1) collection efficiency near pre-Covid levels, 2) strong recoveries/upgrades, 3) decline in stress across core segments, 4) strong traction in retail deposits and 5) strong pick-up in disbursements in its core mortgage book. With credit growth expected to pick up and normalising credit costs, earnings would improve.
Outlook
We maintain our Buy rating, with a TP of Rs.110, valuing the stock at 0.7x P/ABV on the FY24e book.
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