DCB Bank (DCBB IN) – Q1FY27 Result Update – Better NIM & cost to assets key levers to core RoA – BUY
Published on 28 Jul 2026
DCBB saw a good quarter as core PAT was a beat due to better NII and asset quality that led to lower provisions. Loan growth was muted due to seasonality, however, we don’t see a risk to our loan CAGR assumption of 17%. While reported NIM was 4bps down QoQ to 3.35%, margins may improve led by better yields (due to loan mix) & fall in deposit cost. We raise NIM by ~5bps for FY27/28E to 3.15% each. Cost to assets fell by 2.6% in FY25 to 2.45% FY26 and it is likely to further decline to 2.3%. As per bank, ECL impact may not be material due to improving asset quality and floating provision of INR 2.1bn. We keep multiple at 0.9x and raise TP to INR 215. Retain ‘BUY’.
