Buy DCB Bank, target price Rs 150: Prabhudas Lilladher

Prabhudas Lilladher has buy call on DCB Bank with a target price of Rs 150. The current market price of DCB Bank is Rs 113.65.

DCB Bank, incorporated in the year 1995, is a banking company (having a market cap of Rs 3543.10 Crore).

DCB Bank 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 30-09-2022, the company has reported a Standalone Total Income of Rs 1099.21 Crore, up 5.52 % from last quarter Total Income of Rs 1041.69 Crore and up 13.67 % from last year same quarter Total Income of Rs 967.01 Crore. The bank has reported net profit after tax of Rs 112.35 Crore in latest quarter.

Investment Rationale
Bank retained its guidance to double balance sheet over 3-4 years and hence the brokerage builds a loan CAGR of 19% over FY23-25E. Asset quality improved with GNPA at 3.63%, driven by lower gross slippages.
Slippage run-rate is expected to fall over next 2 quarters. DCB is targeting a RoA/RoE of 1.0%/14% which would be achieved by FY25E. Prabhudas maintains ‘BUY’ rating and multiple at 1.0x Sep’24 ABV, keeping TP unchanged at Rs 150.