Buy DCB Bank; target of Rs 178: Anand Rathi

Anand Rathi's research report on DCB Bank

Strong traction in fee income, stable margins and lower opex led to sharp improvement in DCB Bank’s Q3 operating profits. Headline asset quality was stable. Key positives were: 1) better margins (up 3bps q/q) 2) strong traction in fee income, 3) improved collection efficiency across key segments and 4) lower stress pipeline. Strong credit growth, NIM expansion and normalising opex would enable a pick-up in earnings growth.

Outlook

We retain our Buy, with a higher 12-mth TP of Rs178 (earlier Rs170), 0.8x P/ABV on the FY27e book.