Neutral DCB Bank; target of Rs 150: Motilal Oswal

Motilal Oswal recommended Neutral rating on DCB Bank with a target price of Rs 150 in its research report dated January 25, 2024.

Broker Research

January 29, 2024 / 20:12 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on DCB Bank

DCB Bank (DCBB) reported 11% YoY/flattish QoQ growth in PAT to INR1.3b (in line), led by weak NII growth (6% lower than MOSLe). NII grew 6% YoY to INR4.7b (flat QoQ, 3% lower than MOSLe). NIM continued to moderate 21bp QoQ to 3.48% during the quarter. Advances grew 18% YoY, supported by healthy growth in mortgages, Agri, and co-lending advances. Deposits rose 19% YoY/3.6% QoQ, led by growth in SA deposits, resulting in a 109bp QoQ increase in CASA ratio to 26.1%. Slippages increased to INR4.3b (vs. INR INR3.9b in 2QFY24) resulting in a 7bp QoQ rise in GNPA to 3.4%. The restructured book declined QoQ but remained elevated at ~INR11.6b (3% of loans). PCR improved to 65%. We trim our earnings estimates by 3.7%/7.5% for FY24/FY25, amid cost and margin pressures.

Outlook

We estimate FY25E RoA/RoE at 0.9%/12.2%. Reiterate Neutral with a TP of INR150 (based on 0.9x Sep’25E ABV).

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