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DCB Bank Q2FY18 Result Update - Rating - HOLD - Arihant Capital Markets

Posted On: 2017-10-21 04:42:15

DCB Bank Ltd. reported strong growth this quarter. Operating Profit came in at Rs. 124 Cr. for Q2 FY18 as against Rs. 101 Cr. in Q1 FY17 registering robust growth of 23%. Net profit increased to Rs 59 Cr up by 21% YoY and de-grew by 10% sequentially.


Deposits for the bank grew at 16% YoY and 7% sequentially. The CASA portion for the bank stood at Rs 5,323 cr rising to 37% of the deposits & 4% sequentially. Retail term deposits stood at 52%. Cost of funds decreased by 12 bps sequentially to 6.5%.

NIM & Advances:

NIM for the quarter came in at 4.22 staying flat sequentially & grew by 26 bps YoY. Bank's advances comprise of Retail Mortgages (42%); Gold Loans (2%); Commercial Vehicles (5%); SME / MSME (12%); Agri and Inclusive Banking (AIB) (17%), Construction Finance (3%) and Corporate Banking (17%). C/D ratio for the bank stood at 85%. Yield on advances dropped by 57 bps YoY and 16 bps sequentially at 11.4%.

Asset quality:

Asset quality for the bank stood stable. Gross NPA for the quarter stood at 1.82% while Net NPA was at 0.90% YoY basis. Fresh slippages during the quarter were Rs 77.5 crs vs. Rs 85.6 crs sequentially and Rs 50 crs YoY. Recovery during the quarter stood at Rs 21.2 crs vs. Rs 21 crs sequentially and Rs 13.9 crs YoY. PCR for the quarter stood at 71.9%.


Bank has added 16 new branches taking the total to 306 and 3 ATM's taking the total to 507. Cost to income ratio for the bank increased to 60.29% from 57.23% QoQ and 59.96% YoY.


We have pegged a multiple of 2.2(x) to FY 19E ABV & arrived at a fair value of Rs.200 per share. At CMP of Rs 184 the stock is available at its FY 19E P/ABV of 2.0(x). We have "HOLD" rating on the stock.

Shares of DCB Bank Limited was last trading in BSE at Rs.178.65 as compared to the previous close of Rs. 181. The total number of shares traded during the day was 37949 in over 458 trades.

The stock hit an intraday high of Rs. 182.8 and intraday low of 177. The net turnover during the day was Rs. 6811068.

Source: Equity Bulls

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