Tuesday, 17 July 2018

DCB Bank Ltd's Q1FY19 standalone net profit rises 6.6% yoy to Rs69.50cr : In-line with Estimates

DCB Bank’s Q1FY19 NII has improved by 17.1% to Rs273cr against Rs 233.2 cr yoy. It’s net profit was in-line with the estimates, which has improved by 6.6% to Rs 69.5 cr against Rs 65.2 cr yoy. GNPA for Q1FY19 came at 1.86% against 1.79% qoq, which has increased by 7bps. NNPA for the quarter were flat qoq at 0.72%.
  • Net advances of the bank for Q1FY19 improved by 30.6% yoy to Rs21,243cr. The CD ratio of the bank for the quarter was at 84.86%.
  • Loan growth was driven by strong traction in the corporate (+48% yoy), AIB (+38% yoy) and SME (+43% yoy) books. Mortgages growth at 19% was lower than total advances growth. In the smaller segments, CV (+57% yoy) and Construction finance (+31% yoy) grew strongly.
  • The bank highlighted competition across all forms of retail lending.
  • Entire book is linked to MCLR, except some loans like CV and tractors, which are on a fixed rate basis. Bank has increased MCLR by ~16bp in last three months
  • As on Q1FY18 end, the bank deposits grew by 31% to Rs25,032cr.
  • Retail CASA & Retail Term Deposits continued to provide a stable resource base to the Bank. Retail deposits (including Agri and Inclusive Banking) were 75% of total deposits.
  • CASA ratio stood at 24.63% as on June 30, 2018. CASA per branch declined to Rs21.8cr vs. Rs22.3cr in 4QFY18.
  • Net interest margin for Q1FY19 was at 3.90% as against 4.23% for Q1FY18 and 4.09% for Q4FY18. Management stated that margins are under pressure, especially in Mortgage and Corporate Loan book.
  • Management reiterated that the NIM would not contract beyond 3.75-3.80%. Increase in T2 capital in 4QFY18 (at 9.85%) pushed up cost of funds in Q1FY19.
  • Although the bank met the overall PSL commitments, it fell short in the agriculture segment, wherein it bought PTC at low rates, impacting NIMs to some extent
  • Capital Adequacy Ratio (CAR) was at 15.55% as on June 30, 2018 with Tier I at 12.02% and Tier II at 3.53% as per Basel Ill norms.

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