Earnings Outlook
DCB Bank's Apr-Jun net profit seen up 16% YoY
This story was originally published at 15:06 IST on 23 July 2024
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By Sourabh Kumar
MUMBAI – DCB Bank’s net profit for Apr-Jun is likely to rise 16% on year to 1.47 bln rupees owing to growth in advances, according to estimates by eight brokerages. The private bank will detail its earnings on Wednesday.
On a sequential basis, the net profit is seen falling 5.7% because of moderation in the net interest margin. For Jan-Mar, the bank reported a net profit of 1.56 bln rupees.
"We expect net interest margins to decline 6 basis points on a quarterly basis due to lower yields along with the flat cost of funds," Prabhudas Lilladher Pvt Ltd said in a pre-earnings report. On the other hand, Axis Securities expects the net interest margin to remain flat.
The net interest income is projected to rise 11.7% on year to 5.26 bln rupees in Apr-Jun. Sequentially, it is expected to show an increase of 3.6%. In Jan-Mar, the net interest income was 5.08 bln rupees.
"NII growth will be slower than average loan growth due to the rise in cost of deposits outpacing yield on advances," YES Securities (India) said in a report.
The private lender’s loan growth is expected to remain healthy, with Axis Securities forecasting a rise of 18% year-on-year and IDBI Capital seeing a growth of around 17%. In the previous quarter, advances grew 19% to 409.25 bln rupees. Similarly, the bank’s deposits are expected to post robust growth. DCB Bank’s deposits were at 493.53 bln rupees as of Mar 31.
Slippages are expected to be stable sequentially, the brokerages said. Meanwhile, provisions are likely to be higher on a sequential basis due to relatively low provisions in Jan-Mar. In the March quarter, fresh slippages were at 3.35%, from 4.63% a quarter ago. Provisions and contingencies also fell to 54.1% on year in the March quarter.
Analysts will watch out for commentaries on return on assets, growth outlook with a new management in place, and asset quality. Shares of the bank were down 2.5% at 130.53 rupees at 1333 IST, on the National Stock Exchange.
Following are the Apr-Jun earnings estimates for DCB Bank, in mln rupees, based on reports from eight brokerages:
| Brokerage | Net Interest Income | Net Profit |
| Anand Rathi Share and Stock Brokers Ltd | 5,128.00 | 1,467.00 |
| Axis Securities Ltd | 5,310.00 | 1,460.00 |
| IDBI Capital Market Services Ltd | 5,267.00 | 1,489.00 |
| Kotak Institutional Equities | 5,218.00 | 1,344.00 |
| Motilal Oswal Financial Services Ltd | 5,300.00 | 1,400.00 |
| Nirmal Bang Equities Pvt Ltd | 5,382.00 | 1,548.00 |
| Prabhudas Lilladher Pvt Ltd | 5,175.00 | 1,549.00 |
| YES Securities (India) Ltd | 5,264.00 | 1,488.00 |
| Average | 5,255.50 | 1,468.13 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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