DCB Bank Sees Bullish Outlook, Target Price Set at Rs 272 by Anand Rathi

DCB Bank Shows Strong Performance in Q4FY26

DCB Bank has reported a strong performance in the fourth quarter of fiscal year 2026, with balance sheet growth remaining above the system average. The bank's deposits saw a year-over-year growth of 20.9%, while loans increased by 17.6% year-over-year. Net interest margin (NIM) improved by 12 basis points quarter-over-quarter, accompanied by a sharp quarter-over-quarter and year-over-year improvement in asset quality.

Notably, net slippages turned negative at -21 basis points, compared to 45 basis points in the previous quarter. Gross slippages (excluding gold) declined to 1.5%, with a broad-based improvement across segments. The bank's improved margin, strong fee income, and controlled operating expenses drove a 27.5% year-over-year growth in core operating profit.

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Growth visibility remains healthy, with the management guiding for 18-20% loan growth. Looking ahead, with stable margin, healthy fee income momentum, and moderate credit cost, we expect return on equity (RoE) to sustainably improve from approximately 11-12% to 13-14% over fiscal years 2027 and 2028.

Outlook

In light of the bank's strong performance and positive outlook, we maintain a BUY rating on DCB Bank with a 12-month target price of Rs. 272, valuing it at 1.1 times fiscal year 2028 estimated price-to-book value.