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Informist, Thursday, Oct. 16, 2025

By Adhithya Aji 

MUMBAI – DCB Bank Ltd. is expected to report a marginal decline in its September quarter net profit on both a year-on-year and sequential basis due to a rise in the cost of deposits, even though this will be partly offset by healthy growth of interest income, according to brokerages tracking the lender. The bank's net interest income is likely to rise by double digits on year but is estimated to fall sequentially.

The bank is expected to report a net profit of INR 1.54 billion for the reporting quarter, which is a 1% decline on a year-on-year basis and an over-2% decline sequentially, according to an average of estimates from eight brokerages. The highest estimate of net profit is INR 1.81 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest estimate is INR 1.38 billion from Prabhudas Lilladher Pvt. Ltd.

The net interest income of DCB Bank is expected to be INR 5.77 billion for the reporting quarter, up 13% on year but down nearly 1% sequentially. The highest estimate of top line is INR 5.96 billion from Kotak Securities Ltd. and the lowest is INR 5.62 billion from Nirmal Bang Equities Pvt. Ltd.

The outlook for the bank's net interest income is mixed as the growth in interest income will be partly offset by the increase in the cost of deposits, according to analysts. The net interest income is expected to grow slower than average loan growth due to the rise in cost of deposits outpacing the rise in yield on advances, according to YES Securities. This may lead to a sequential fall in the net interest margin, the brokerage said.

Prabhudas Lilladher expects the lender's net interest income to grow 1.5% on quarter, led by loan growth. The bank is likely to see a loan growth of 4.2% sequentially, the brokerage said. The bank will likely report a loan growth of 20% on year, which is expected to drive a 10% on-year rise in operating profits, Kotak Said. "Sequential loan growth will be in the 4% ballpark due to idiosyncratic growth trajectory," YES Securities said. The brokerage expects the sequential growth in fee income to be higher than loan growth due to seasonality.

Pre-provision operating profit is expected to be lower in the September quarter due to pressure on margins. The pre-provisional operating profit is estimated at INR 2.66 billion, down 18.5% on quarter due to a fall in other income and margins, Prabhudas Lilladher said. For the June quarter, the bank had reported a net pre-provisional operating profit of INR 3.26 billion, up 7% on quarter.

Brokerages expect the bank's provisions to fall, which will affect its net profit. The provisions of the bank are estimated at INR 810 million for the September quarter, down nearly 30% on quarter but up nearly 78% on year, ICICI Securities said. Provisions are set to decline sequentially as the bank has created additional provisions in the trailing quarter, YES Securities said.  

Brokerages have a mixed outlook on slippages. "Slippages would be higher on sequential basis due to seasonality. Provisions will be lower on sequential basis", YES Securities said. ICICI Securities, however, estimates slippages will fall 22.5% on quarter to INR 4.5 billion.

DCB Bank will announce its earnings for the September quarter Friday. The net interest margin and return on equity are the key variables to monitor, according to Kotak Securities.

Thursday, shares of DCB Bank closed marginally higher at INR 129.90 on the National Stock Exchange.  The stock is down 7% from Jul. 31 when the company had reported its earnings for the June quarter.

Of the 16 brokerage reports available on the company with Informist, 15 have a 'buy' or equivalent rating on the stock and one has a 'sell' rating. The average target price for 'buy' recommendations is INR 166.  

The following are the Jul-Sept earnings estimates for DCB Bank from eight brokerages in descending order of the estimate of net profit in INR million:

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Edited by Deepshikha Bhardwaj

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