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Buy DCB bank; target of Rs 160: Dolat Capital Market

Dolat Capital Market is bullish on DCB bank has recommended buy rating on the stock with a target price of Rs 160 in its research report dated May 09, 2021.

June 09, 2021 / 06:33 PM IST
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Dolat Capital Market's research report on DCB bank

DCB bank’s NII and operating profits declined YoY by 4% and 3% YoY respectively owing to interest reversals of previous quarter’s pro forma slippages (~ 30-40 bps impact on NIM) and higher opex. Asset quality metrics were in-line with continued improvement in collection efficiency across segments till March, limited slippages at 2.7% for FY21, and in-line restructured book at 4.3% of advances, mostly from the mortgage (primarily LAP) and CV book. While PCR has fallen to 45% from 53% levels a year ago, the bank continues to hold contingency buffers of Rs2.9bn or 1.1% of advances. Slippages at 2.7% for FY21 were below FY20 (2.8%), though higher than normalized levels for the bank. Pro forma gross NPAs increased by 40 bps QoQ and 160 bps YoY to 4.1% mainly on the back of weaker recoveries/upgrades.


We maintain our BUY recommendation on the stock with an unrevised TP of Rs160, valuing the bank at 1.2x of FY23E P/ABV. The stock currently trades at 0.7x FY23E P/ABV.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: May 14, 2021 03:31 pm

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