Buy Development Credit Bank; target 72: Pankaj Pandey

Pankaj Pandey, Head of Research, ICICI Direct in an interview with ET Now talks about Development Credit Bank.

Mid-cap banking, what would be the top idea, private or public?

In terms of a small bank, we have come up with a coverage on the Development Credit Bank. We feel that the bank had clocked profits last year and going forward also, we would expect things to really improve for the bank and that’s why we have a target price of 72 on the counter.

But for all this thing to pan out, the bank really requires a period of about two years. In terms of the delinquencies it has, most of it has now cleaned up. Going forward if you look at the efficiency from a branch wise, what this bank is doing with 80 branches, a lot of private sector banks are not really doing with double the branches of that. So given that, it has got a good potential and we feel that with the kind of levels it is at current levels, the risk reward really works in favour and going forward if somebody has got a two-year view, this stock could really do that.