PL First Cut – DCB Q3FY24 - Core PPoP in-line; lower NII offset by better fees; higher slippages offset by stronger recoveries

PL First Cut – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

DCB Q3FY24-Core PPoP in-line; lower NII offset by better fees; higher slippages offset by stronger recoveries

◼️NII was a tad lower at Rs4.74bn (PLe Rs4.81bn) due to lower NIM as loan growth was in-line

◼️NIM was a miss at 3.65% (PLe 3.73%) owing to higher funding cost

◼️Loan growth was in-line at 18.2% YoY while deposit growth was 19.3% YoY (PLe 18.8%).

◼️Other income was higher at Rs1.24bn (PLe 1.1bn) led by better fees; opex was largely in-line at Rs3.86bn.

◼️Core PPoP was broadly as per expectations at Rs1.86bn

◼️Gross slippages were higher at Rs4.28bn (PLe Rs3.75bn), recoveries too were stronger at Rs33.9bn (PLe Rs28.5bn)

◼️GNPA increased QoQ by 7bps to 3.43% although PCR improved QoQ from 63% to 65%

◼️Provisions were Rs410mn (PLe Rs400mn)

◼️PAT was Rs1.27bn (PLe Rs1.24bn) while core PAT was Rs1.08bn (PLe Rs1.09bn)

◼️The stock trades at 0.95x/0.82x on FY25/26E ABV.