DCB Bank shares rise 16% today, yet down 38% from record high; what's next?

DCB Bank shares rose 16% in early deals on Monday after the private sector lender reported its Q2 earnings. The stock approached its 52-week high of Rs 150.70 reached on June 10, 2025. The banking stock scaled a high of Rs 148.90 in the current session. Market cap of the bank stood at Rs 4650.14 crore. 

However, the banking stock is still down 38% from its all-time high of Rs 244.65. 

Brokerage SMIFS is bullish on the stock. 

"We believe DCB remains well-placed to achieve its 1 per cent ROA / 14 per cent ROE guidance by FY27, driven by solid loan growth, NIM expansion, fee traction, productivity benefits, and continued benign asset quality. Valuation remains attractive, with the stock trading at ~0.6x FY27E P/B. Maintain BUY," it said.

MOFSL reiterated its BUY stance on the bank with a target of Rs 165. 

The brokerage said the bank reported a steady quarter with a beat in earnings amid lower provisions, healthy NII, and controlled opex. 

Margins rose 3 basis points QoQ, and the bank expects it to improve further going forward if no further rate cut occurs. 

"Business growth was healthy with increased focus on gold loans and co-lending. Asset quality improved with slippages moderating sequentially, and management expects credit cost to remain below 45bp for the full year. We tweak our earnings estimates for FY27 and project an FY27E RoA/RoE of 1.01 per cent/15.3 per cent," MOFSL said.

The bank logged a 18% rise in profit after tax to Rs 184 crore in Q2 from Rs 155 crore a year ago. Advances grew 19 per cent YoY. Gross NPAs as on September 30, 2025 came at 2.91 per cent. Net NPAs came at 1.21 per cent as on September 30, 2025.  Net interest income climbed 17% to Rs 596 crore in Q2 against Rs 509 crore a year ago. 

Total income rose 10% to Rs 782 crore in Q2 against Rs 714 crore in the September 2024 quarter.