Login To Trade
No Result found
Fund Manager Speak
Hindustan Zinc Ltd (Q4 FY14)
Apr 23, 2014 , 17:30
Reliance Industries (Q4 FY14)
Apr 23, 2014 , 17:20
Mukul Bagga, Managing Director, Quest Diagnostics India
Apr 23, 2014 , 12:16
Tata Global Beverages Ltd - Express Idea
Apr 22, 2014 , 17:20
Refinancing your Home Loan
Apr 22, 2014 , 12:15
TK Kurien, CEO and Member of the Board, Wipro Ltd
Apr 22, 2014 , 11:19
Most Popular Reports
Mr. K. Vaman Kamath, Chairman, ICICI Bank Limited
Jun 22, 2010 , 10:27
Sai Ramakrishna Karuturi, Founder, Managing Director, Karuturi Global Ltd
Nov 30, 2009 , 11:21
Christine Lagarde ,Managing Director, IMF
Jul 13, 2011 , 17:10
Mr. T.M. Bhasin, Chairman & Managing Director, Indian Bank
Dec 13, 2010 , 14:59
Vinita Bali, Managing Director, Britannia Industries
Jun 14, 2010 , 08:59
Mr. Vijay Kumar Arora, Chairman and Managing Director, LT Foods Ltd
Nov 23, 2010 , 11:50
Mr. Partha S. Bhattacharyya, Chairman and Managing Director, Coal India Limited
Oct 19, 2010 , 10:34
India may witness below normal monsoon: IMD
About one-third of the shadow-banking products are riskier: S&P
Malaria claims about 50K lives in India each year
Lok Sabha elections: 81% polling in West Bengal, 53% polling in Mumbai
BSE SME IPO
Automobiles & Ancillaries
Banking & Financials
Cap Goods, Eng & Infra
Gems & Jewellery
Hotels & Tourism
Media & Entertainment
Metals, Mining & Minerals
Oil & Gas
Paper & Packaging
Pharma & Healthcare
Shipping & Shipyard
Research & Ideas
Development Credit Bank (Q2 FY12)
India Infoline Research Team / 11:42 , Oct 14, 2011
CMP Rs43, Target Rs50, Upside 16.3%
DCB’s loan book grew by 1.9% in Q2 FY12 sequentially as against our expectation of 5%. A large part of this growth was driven by higher yielding SME+MSME (28% of Advances) and Retail segments (41% of Advances) which grew by 14% and 23% qoq, respectively. The robust growth in Retail segment was mainly led by mortgages (19% qoq). With continued focus to reduce its exposure to corporate, personal loans and CV/CE/STVL, DCB has been successful in pulling down their total contribution from 28% of the loan book as on 31st Mar’2011 to 23% as on 30th Sep’2011. Management has guided to grow by 16-17% in FY12 with the main growth drivers being SME, Mortgage and Agri. The loan book will shift towards Agricultural lending in H2 FY12 (to grow by Rs3-4bn) in order to meet the PSL target. Bank is not too keen to grow aggressively given the current macro situation.
Growth in deposits was higher than advances reporting 4.7% qoq growth, ahead of our expectation of 4%, resulting into a decline in C/D ratio from 71% to 69%. Wholesale deposits (10% of deposits) have witnessed a decline both in absolute terms and as proportion of total deposits which is key positive for the bank. Although CASA declined marginally by 10bps qoq, it grew by 4.2% in absolute terms. Despite higher interest rates, bank is confident of sustaining CASA above 30%.
NIM improved significantly by 30bps sequentially from 3.1% to 3.4% owing to sharp increase in YoA (80bps qoq), the impact of which was partially offset by 30bps increase in CoF. The improvement in YoA was supported by lending rate hikes and favorable shift in the loan mix (towards high-yielding retail and SME/MSME segments). However, YoA is expected to stabilize in ensuing quarters due to structural shift in portfolio towards lower yielding PSL book and increasing difficulty in passing-on the rate hikes to customers in subdued credit environment. On the other hand, CoF would continue to inch up in the next couple of quarters with lagged impact of deposit rate hike kicking in. Management expects re-pricing of Retail TDs to turn favorable post March 2012. Keeping these factors in view, NIM is likely to correct by 25-30bps over the next two quarters. Management’s outlook on NIM for FY12 is 3.1-3.2%.
Asset quality has improved over past few quarters owing to shift towards better quality assets and declining exposure to personal loans, CV/CE/STVL and corporate loans. Fresh additions stood at Rs110mn in the current quarter as against Rs350mn in previous quarter, thereby reporting a steep decline in delinquency ratio from 3.3% to 1%. As per management, there are no major concerns in the Mortgage and SME/MSME segments. However, a couple of accounts in the corporate segment are looking vulnerable.
Cost/Income ratio has declined from 78.1% to 74.6% sequentially as a result of bank’s efforts to increase productivity with the existing cost. Currently the bank operates through 82 branches and will add 10 more branches by March 2012. Branch expansion would be funded through plough backs. Over the next two years, DCB plans to bring down the C/I ratio to 60%.
Other Income has been weak in the past few quarters mainly due to margin compression witnessed in Bancassurance business. Although the volume has increased, new regulations and competition have eroded the margin. Also forex income has been quite volatile in past few months. However, management expects other income to be better in H2 FY12 as compared to H1 FY12.
With Tier-1 capital at 11.2%, DCB is well-capitalized for the planned balance sheet expansion in the medium term. The bank has in place approval from shareholders for raising Rs3bn via QIP and Rs2.5bn through a rights issue. The management intends to raise Rs1.5-2bn at an opportune time during the year.
We raise FY12 PAT estimate by 20% factoring the strong operational performance in Q2 FY12 and zero tax liability (as against earlier budgeted 18%). Retain recommendation as BUY with a lowered price target of Rs50.
Total Interest Inc
Net Interest Inc
Yield on Advances (%)
Cost of Funds (%)
Non-interest income (%)
Non-int inc/Int exp (%)
Cost to Income (%)
Gross NPA (%)
Net NPA (%)
Source: Company, India Infoline Research
Y/e 31 Mar (Rs m)
Total operating income
yoy growth (%)
Operating profit (pre-provisions)
Yoy growth (%)
Source: Company, India Infoline Research
Friday, 25 April 2014 01:20 IST
Connect with IIFL :
Products & Services
Stock SMS Alerts
Document & Info
Chat with Experts
Home Loan EMI
Auto Loan EMI
Education Loan EMI
Disclaimer - Research
Disclaimer - Discussion Boards
Disclaimer - Chat
Disclaimer - Twitter
Terms & Conditions
It's earnings season. www.indiainfoline.com, a part of the IIFL Group, presents you real-time, comprehensive, and in-depth analysis of company earnings to give you that investment edge. The 'Results Calendar' helps you keep track of all important results. The 'Top News' section gives you news coverage as an when it breaks. Our strong research team powers 'IIFL Research Updates' giving you complete earnings analysis along with a call for action. The 'Earnings Preview' section gives you a holistic picture of how the sector will perform along with what to expect from individual companies.
Besides IIFL Research, we also present what peer brokerages are talking about a particular stock in our section - 'Other Brokerage Views.' The 'Stocks in Focus' section is unique as it offers you a quick check of how the company’s stock is performing ahead and after the results. The 'Video' section is embedded with quick-takes on companies which have announced their results. The 'Conference Calls' and 'Transcripts' section along with Leader Speak allow you to understand management commentary and take a fundamental call on a particular scrip. For those wanting to view historical earnings data, 'Results History' is your point of call.
By popular demand, we have retained 'Today's Poll', 'Discussion' and 'Corporate Announcements.' For those taking their baby steps in the financial space and having a strong desire to learn and improve their trading strategies, we have 'Everything you need to know about earnings' to guide you through.
Empowering SMEs, Empowering India
No economy can thrive without industry. In a developing country like India, this role is played by small and medium businesses which not only provide jobs, they also help innovate and help in the overall socio-economic development of the country.
In India, SMEs contribute 45% of the industrial output, 40% of exports, 42 million jobs and produce more than 8,000 quality products for domestic and international markets. They create one million jobs every year, not a trifle amount in a country with a billion plus population.
SMEs today are exposed to greater opportunities for expansion and diversification across sectors. We understand the challenges that SMEs face like sub-optimal scale of operation, technological obsolescence, supply-chain inefficiencies, increasing domestic and global competition, fund shortages, change in manufacturing strategies and turbulent and uncertain market scenario.
To help fuel this expansion, www.indiainfoline.com, a part of the IIFL Group, has decided to carve a separate niche to power this space. Besides providing news and information on events, the section will provide case studies to help you learn faster through example. Success stories of people who have overcome the odds to pep you up when the going gets tough. Expert comments on important day-to-day happenings, sector trends and things to note. The Leader Speak section give you an inside view of what your peers are up to.
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
India Infoline Ltd. All rights Reserved.
National Stock Exchange of India Ltd. SEBI Regn. No. : INB231097537/ INF231097537/ INE231097537,
Bombay Stock Exchange Ltd. SEBI Regn. No.:INB011097533/ INF011097533/ INE011097533,
MCX Stock Exchange Ltd. SEBI Regn. No.: INB261097530/ INF261097530/ INE261097537,
United Stock Exchange Ltd. SEBI Regn. No.: INE271097532.