Buy DCB Bank, target price Rs 145: ICICI Securities

ICICI Securities has buy call on DCB Bank with a target price of Rs 145. The current market price of DCB Bank Ltd. is Rs 106.75. Time period given by analyst is one year when DCB Bank Ltd. price can reach defined target.

DCB Bank Ltd., incorporated in the year 1995, is a banking company (having a market cap of Rs 3281.39 Crore).

DCB Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 1041.69 Crore, up .67 % from last quarter Total Income of Rs 1034.71 Crore and up 7.87 % from last year same quarter Total Income of Rs 965.67 Crore. The bank reported net profit after tax of Rs 97.15 Crore in latest quarter.

Investment Rationale
During the past 3 years, lower credit growth and concern over asset quality amid covid led to decline in valuation. Considering DCB’s strong operational history, stable management team and improving visibility on credit growth revival, the brokerage believes the stock is likely to rerate going forward. Maintain BUY with a revised target price of Rs145 (earlier: Rs130), as we roll over estimates to Sep’23 BVPS. Key risks: 1) Stress exceeding anticipated levels, and 2) deceleration in loan growth.

Promoter/FII Holdings
Promoters held 14.85 per cent stake in the company as of 30-Jun-2022, while FIIs owned 12.45 per cent, DIIs 37.62 per cent.