PL First Cut - DCB Q2FY24

PL First Cut – DCB Q2FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

DCB Q2FY24-Core PPoP beat at 14.1% led by higher fees due to PSLC. Slight miss on asset quality

--NII was a in-line at Rs4.75bn; NIM was a slight miss while credit growth was a bit higher

--Loan growth was 19.1% YoY (PLe 18.5%) while deposit growth was 23.1% (PLe 20.8%).

--QoQ deposit growth was led by RTD which grew by 7.3% (vs 6.4% overall) which was a positive.

--NIM was a slight miss at 3.85% (PLe 3.88%) led by lower yields.

--Other income was lower Rs1.07bn (PLe 1.12bn); while fee income came in higher at Rs0.97bn due to PSLC

--Opex was slightly better at Rs3.72bn (PLe Rs3.8bn) due to both lower employee cost and other opex.

--PPoP was 1.2% below PLe at Rs2.1bn while core PPoP was 14% above PLe

--Asset quality disappointed; gross slippages were higher at Rs3.95bn (PLe Rs3.3bn)

--GNPA/NNPA increased QoQ by 10bps/8bps to 3.36%/1.19%.

--Provisions were Rs397mn (PLe Rs450mn) while PCR declined by 1.3% QoQ to 62.8%

--PAT was higher at Rs1.27bn (PLe Rs1.21bn) while core PAT was 23% higher to PLe

--The stock trades at 0.7x/0.6x on FY25/26E ABV.