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Informist, Thursday, Jul. 23, 2026

By Janaki Venugopalan

MUMBAI – DCB Bank Ltd. is expected to report a surge in its on-year net profit for the June quarter driven by healthy growth in loans and stable asset quality. However, the net profit is likely to decline on a sequential basis due to higher operational costs, provisions, and slippages in the June quarter due to seasonal factors, according to brokerages tracking the bank.

The private sector bank is expected to report a net profit of INR 1.95 billion for the June quarter, according to the average of estimates from 12 brokerages. This will be a near 24% increase from INR 1.57 billion a year ago. However, it will be down over 5% on a sequential basis from INR 2.06 billion in the trailing quarter. The highest estimate for the bank's June quarter net profit is INR 2.21 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 1.47 billion from Prabhudas Lilladher Pvt. Ltd.

The bank is expected to report a net interest income of about INR 6.79 billion in the June quarter, up only slightly from INR 6.55 billion in the previous quarter but up 17% from the year-ago quarter, according to the estimates. The highest estimate for net interest income is INR 6.95 billion from Motilal Oswal Financial Services Ltd. and the lowest is about INR 6.59 billion from Prabhudas Lilladher.

The net profit is expected to increase on year with steady loan growth, better asset quality, and expansion in the net interest income. The bank's advances and deposits are expected to grow at a healthy pace due to improved co-lending loans to micro, small, and medium enterprises. The ongoing mortgage mix shift towards more business loans such as loans against property over traditional home loans will also boost profitability. This growth in advances and deposits will lead to expansion in the net interest income, the brokerages said. The bank's credit cost is expected to be steady and the return on assets is expected to remain at 1%, according to Motilal Oswal.

The bank's net interest margin is expected to be flat or rise marginally to 3.1% on quarter as the repricing of deposits is likely to offset cuts in the lending rates, Kotak said. The bank's operational expenses for the June quarter are expected to increase due to higher employee benefit expenses caused by the impact of annual increments, but the rise in operational expense is expected to be lower than the revenue growth. The cost-to-income ratio is also expected to decline, according to brokerages.

The bank's fee income is expected to be lower than its loan growth due to seasonality, especially from agricultural loans, further weighing down the net profit of the bank on a sequential basis, according to brokerages. The operating profit is expected to be flat despite the 20% on-year loan growth due to lower non-interest income and treasury income, Kotak said.

The company is expected to report higher slippages on a sequential basis due to supply chain disruption faced by micro, small, and medium enterprises due to the war in West Asia, the residual impact from higher US tariffs, and slow recovery in nominal GDP growth. Provisions are also expected to increase due to a rise in fresh slippages, bad microfinance institution loans, expected credit loss, and one-offs from the previous quarter.

The private sector bank's net interest income is expected to increase both on year and sequentially due to a stable net interest margin, loan growth, and improved asset quality. However, the increase in the net interest income is likely to be lower compared to the previous quarter as a consequence of higher slippages in the June quarter.

The private sector bank raised its interest rates on foreign currency non-resident (banks) deposits for three-to five-year tenures by up to 363 basis points to 7.13%, which is among the highest. DCB Bank will detail its June quarter earnings Friday. Thursday, shares of DCB Bank closed at INR 189.72 per share on the National Stock Exchange, up slightly from Wednesday. The stock is down marginally since the bank announced its March quarter earnings on April 24.

Of the 12 brokerage reports on the bank available with Informist, 11 have a "buy" recommendation on the stock while one has a "sell" recommendation. The average target price for the "buy" recommendations is INR 229.1 per share, which is almost 21% higher than the current market price. The target price for the "sell" recommendation is INR 195.

Following are the June quarter earnings estimates for DCB Bank from 12 brokerages in descending order of the estimates of net profit in INR billion:

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Edited by Pankaj Aher

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