Dhanlaxmi Bank - Gradually moving out of the woods... - ICICIdirect

Dhanlaxmi Bank, one of the old private sector banks, has started exhibiting signs of improvement and stability under the guidance of the current management (consisting of top veteran personnel of bank), which has been active since February 2012.

The bank's growth and profitability got impacted in H2FY12 owing to higher opex factored in P/L, conflicts with employee unions and lack of clarity over future strategy. After a strong growth of ~54% CAGR in business during FY09-Q2FY12, which resulted in bloated financials, the bank is consolidating with shedding of wholesale corporate loans and relying on stable retail deposits for funding.

We, therefore, believe, after the phase of consolidation in FY13, net profitability will see a surge in FY14 onwards. We estimate the business will grow at a CAGR of 17% over FY13-15E to Rs.26270 crore and PAT for FY14E and FY15E will be at Rs.40 crore & Rs.122 crore, respectively.

Source : Equity Bulls

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