Sunday, April 29, 2018

DCB Bank - Q4FY18 Results - Another Quarter of Robust Performance

DCB Bank continued to deliver healthy performance on all major metrics in 4QFY18 as well led by (a) strong growth in loan book (+28.6% YoY & 9.4% QoQ); (b) all-time high NIMs of 4.16% in FY18 vs. 4.04% in FY17; (c) strong growth in other income (+33.4% YoY & 13.2% QoQ); (d) continued sequential improvement in C/I ratio to 59.4% vs. 62.3% in 3QFY18; and (e) lower fresh slippages of Rs805mn vs. Rs1,031mn in 3QFY18. Led by 70% YoY and 16% QoQ improvement in upgrades and recovery from gross NPA to Rs667mn, its headline gross and net NPA ratio came in at 1.79% and 0.72%, respectively compared to 1.89% and 0.87% in 3QFY18. The Bank’s overall stressed loan portfolio, which improved sequentially, remains within the Management’s comfort zone. 

Management Commentary & Guidance
  • Loan book grew by 28.6% YoY and 9.4% QoQ to Rs203.4bn aided by CV, AIB, Corporate Banking and SME segments. Expecting 22-25% growth in loan book in FY19E, the Bank looks forward to double its loan book over the next 3-3½ years.

  • All-time high NIMs is attributable to some attractive refinancing options used by the Bank. The Management expects NIMs to remain in 3.7-3.8% range on sustainable basis. The Bank expects cost of fund to stabilise at around current level.

  • The Bank opened 56 new branches in FY18 and has completed physical expansion drive started in 2QFY16. Going forward, the Bank will expand branch network in a suitable manner without affecting its overall cost to income ratio as well as profitability.

  • The Bank expects C/I income to improve owing to likely improvement in operational efficiency of existing branches and other distribution channels. It expects to reach C/I ratio of 55% by FY19-end from 59.4% in 4QFY18.

  • The Management is quite comfortable till the gross NPAs remain below 2% and net NPA below 1%, as the Bank’s customers are predominately SME and mid-size business houses. 

  • Its core fee income is likely to grow at healthy pace in next few quarters led by strong growth in income from sale of Priority Sector Lending Certificate and 3rd party product distribution.
DCB-Bank-price
DCB-Bank-Price trend 

Outlook & Valuation
Continuing to focus on increasing loan book in low-ticket Retail, SME and AIB segments, the Bank is augmenting its footprint both on physical and digital front. Though this aggressive expansion strategy might impact its return ratios in the near-term, we believe it is beneficial from long-term perspective. Further, the Management focuses on increasing efficiency of existing network to improve cost to income ratio in the long-term, which will lead to sustained earnings growth. As creditworthiness of its core client group from SME/MSME segment is steadily improving post GST roll-out, we expect further improvement in Bank’s operating performance. Rolling over our valuation to FY20E, we reiterate our BUY recommendation on the stock with a Target Price of Rs247 based on 2.4x FY20E Adjusted book value.
Previous Read : The Capital Asset Pricing Model: An Overview

3 comments:

Clara Mellor said...

Capitalstars OPENING BELL:
NIFTY SPOT DOWN 14 @ 10502
SENSEX DOWN 35 @ 35575
BANK NIFTY FUTURES DOWN 30 @ 25770
HAPPY TRADING!!!!!!!!!!!
Equity Tips

rohanrj said...

This is one of the best blog because, there are lot of informative postings. Thank you very much for posting and sharing this great article. personal finance tips

rohanrj said...

Good facts! Lengthy ago i found your site and also have been studying alongside. My spouse and i imagined I would abandon my personal 1st review. My spouse and i don’t determine what to convey besides which i possess. credit tips

Disclaimer

Disclaimer : All information given here is for information purpose only. Users are advised to rely on their own judgement or investment advisor when making investment decisions. This blog is not liable and take no responsibility for any loss or profit arising out of such decisions being made by anyone acting on such advice.

Disclaimer && Decalration

This blog is formed for sharing useful information from financial world. This blog aims to increase the awareness among the people so that they are well informed .The blog also shares some details for investor, trader ,newbie friends in stock market on free buy/sell/hold recommendations. Here the recommendations are shared along with information on Stock Splits, Right Issues, Bonus Issues, Latest Stock market updates. This publication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. This publication, its publisher, and its editor do not purport to provide a complete analysis of any company's financial position. The publisher and editor are not, and do not purport to be, registered investment advisors. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Investing in securities is speculative and carries a high degree of risk. Past performance does not guarantee future results. This publication is based exclusively on information generally available to the public and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the publisher cannot guarantee the accuracy or completeness of the information. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured company and/or industry. The publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the company's actual results of operations. Factors that could cause actual results to differ include the size and growth of the market for the company's products and services, the company's ability to fund its capital requirements in the near term and long term, pricing pressures, etc.

References


References :- Link Market - Free Link Exchange, Link Swap and Link Trade Directory
Have you ever tried to exchange links, swap links, or trade links? Was it hard? Use link market instead; - it is easy to use, free and very smart. It will save you hours of work.

Business PandaOnline business index
Xmatrix SoftwareXmatrix software publishes award-winning software, including x dupfile. And we have a xmatrix online business index that is growing.
Eladvertise.net
Buy text link advertisement for unlimited impressions. Act fast. Price starts at 15 euro and goes up.
King Cole Catering
Event and banquet caterer - banquet room rentals - weddings, receptions
Pulbic Adjuster Galveston
Www. Docudamage. Com is an information resource created by a public adjuster for policyholders, adjusters and contractors wishing to learn more about property damage documentation & the claims process.
Public Adjuster Galveston
We are a texas public insurance adjusting firm located in houston, tx. We represent home & business owners to their insurance companies on underpaid property damage claims. We are happy to give you a free evaluation of your claim. Call today!
Foreclosure - Financial - Credit Repair: Tips & Articles
Homeowner, credit repair, foreclosure, mortgage, investment, and stock, tips, articles and help. Financial help articles for consumers.
Used Cars Uk
Autoleague. Co. Uk is the right place for you to find used cars or dealers that sell used cars anywhere in the uk. Advertise your car for free. Make An Extra $2000 - $5000 Every Month With Vemmabuilder!
We will show you how to live a healthier lifestyle and earn a large income for little cost with our vemma products and vemmabuilder marketing system! Apple Computers, Parts, Software And Hd Background Free
Save on computer parts, computer hardware, laptop computers, desktop computers at ewoau. Com. Now free downloads and tons hd background free.
1v Web Design
Website design and development | free seo information and code tips | advertise on our world wide directory | find link partner's to help increase your page rankings | free stuff and much much more. ..
Shop All Broadband & Telephone | Phone Service Providers Here!
Shop communication service providers, price quotes and solutions for cable internet, high-speed satellite, fixed wireless, dsl, t1, t-1, voice t1, integrated t1, pri t1, bonded t1, ds3, ds-3, oc3, oc12, ethernet, vpn, mpls, sip trunking & voip here. Yard Signs
Speedysignsusa is one of the largest suppliers of yard signs, election signs, and political signs. Our store features a large selection of professionally designed templates, an online design tool, and the ability to upload your ready to print artwork Free Music Download
Download free music movies games at http://www. Topfreemusicdownloadsite.com Fixed Gas Detectors
Auric pacific engineering is the leading distributor of fixed gas detectors, portable gas detectors, solenoid valves and gas analyzers.Sediment Erosion Control
Deltalok is a leading company specializing in sediment erosion control, soil erosion control solutions.Harley Davidson Zone
Harley davidson zone! Customize yourself and your harley davidson motorcycle like you've always wanted. Whatever you ride we have what you are looking for. From jackets, boots and helmets to chrome accessories we are your harley davidson zoneLuontaistuotteet Proteiini Hiilihydraatit Immolina Sikainfluenssa
Www. Nutrition. Fi kun ei ehdi kaikista lisäravinteet ja luontaistuote jutuista huolehtimaan. Vitamiini - ja ravintolisä -tuotteet arkeen ja urheiluun. Sikainfluenssa - eli h1n1 virusta vastaan kehitetty immolina Gastrodirect
Grossiste horeca avec plus de 30. 000 articles pour livraison immediate. Garantie, sav, livraison rapide. Ce que il vous faut, four à pizza, refrigeration, materiel de collectivities.Pink Stretch Limousine
Get your pink stretch hummer party limo. Special events, sweet 16, bachelorette party, prom, wedding, bring baby home, kid's birthday, homecoming, graduation, concerts,batmitzvah, corporate events, quinceanera, anniversary. Affordable hire options.