DCB Bank shares rise as Motilal Oswal sees 30% upside

Shares of DCB Bank rose over 4% in the afternoon session today after brokerage Motilal Oswal upgraded the stock to ‘buy’ from the earlier stance of ‘neutral’. DCB Bank stock gained 4.68% to Rs 144 against the previous close of Rs 137.55 on BSE. Market cap of the bank rose to Rs 4,474  crore.

The financial services firm has fixed a price target of Rs 175 per share, a 30 per cent upside from the current levels, citing attractive valuations and strong growth prospects.

"DCB Bank has seen a healthy recovery in loan growth after witnessing sluggish trends during FY20-22. The bank's shift in loan mix toward retail loans has not only shielded its margins but also provided stable, profitable growth. The current valuation of 0.7x FY26E adjusted book value (ABV) appears compelling, especially considering the estimated 21 percent earnings compound annual growth rate (CAGR) for FY24-26E," the brokerage firm said in a recent report.

DCB Bank shares have risen 20.54% in a year but fallen 1.65% in 2024.

DCB Bank shares saw a turnover of Rs 8.41 crore on Thursday as 5.90 lakh shares changed hands on BSE.

The report said the management has focused on expanding business and enhancing digital capabilities.

"We forecast an 18 percent CAGR in the bank's overall balance sheet for FY24-26E, with advances and deposits expected to grow at a 19-20 percent CAGR over the same period," analysts at Motilal Oswal added.

The scrip is trading neither in the overbought nor in the oversold zone, signals its relative strength index (RSI) which is at 60. DCB Bank stock has a one-year beta of 1.1, indicating very high volatility during the period.

DCB Bank shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.