Sandeep Sharma of Hem Securities was among the first to recommend an investment in DCB Bank. DCB was then languishing at Rs. 81. Sandeep promised a target price of Rs. 120 (50% gain) on the basis that DCB Bank has made a “remarkable turnaround in a tough environment by focus on consolidation and steady improvement in most of the parameters”. He added that “DCB is well-placed in terms of capital adequacy and asset quality, which are major concerns of the banking industry”.
Then, DCB Bank was awarded the prestigious title of a potential 100-bagger in Motilal Oswal’s 19th Wealth Creation Study. It is significant that DCB is the only representative of the banking/ financial space in the study.
After that, Saurabh Mukherjea came on record to recommend a buy of DCB on the basis that there are “unique things” about the Bank and that investors would reap “good returns going forward”. In my piece, I also referred to the statements by Narsee Munjee, Chairman, and Murali M. Natarajan, CEO, on how the objective is to be “conservative” and “careful” while lending but also to “double the balance sheet size in the next three years”.
Yet another resource that throws light on DCB Bank is the “initiating coverage” report by Emkay. Emkay recommends a buy on the basis that DCB Bank is “well positioned to exploit profitable business opportunities in its next growth phase”. Emkay states that DCB Bank has a ‘sound and profitable business strategy’, a ‘well-planned network expansion to drive business growth’ and that its ‘relentless asset quality focus will support profitability’.
Edelweiss has echoed the same sentiments in its research report.
Motilal Oswal’s latest “Initiating Coverage” report paints a similar optimistic picture of DCB Bank and assures that “re-rating is imminent”. It expects “core revenues to clock a healthy CAGR of 26% over FY14-17, driven by strong loan growth and largely stable margins”.
Motilal Oswal’s target price for DCB Bank is Rs. 155, which is a whopping 46% upside from the CMP of Rs. 106.
Now, the onus is on each of us to carefully go through the reports and take an informed and independent decision in the matter.
Hi , pls suggest some small caps which can turn in to multibaggesr in long term
ICICI Bank seems to be is a better bet at these levels…I think…bought it
ICICI Bk has market cap of 182,282.61 crore. DCB Has 3,018.94 crores. So, there is no comparison between the two I feel.
Large caps have their own advantages/ disadvantages. Small and midcaps have their own. I think DCB should be compared with other small and midcaps like S. I. Bank, Karur Vasya, CUB etc.
Your point is well taken but DCB can not become 100 bagger simply by passage of time… To illustrate this point, look around yourself..how many branches of HDFC Bank/Axis/ICICI do you see ? and how many branches of DCB do you see…..even in 10 years time it will remain a much smaller bank…and at present valuations P/BV, PE its almost at par with Axis, ICICI …you cannot ignore valuations …hence I suggested ICICI based on valuations
What do they mean by 100-bagger? Will it go from 100 to 10000? 🙂 Should avoid sensationalism especially when it comes to stock market investments. Also, they should mention an indicative timeline. Sure, stock can go from 100 to 10000 in 30 years 😉 But fun aside, am looking at getting into a “Bank” stock for a while now.. So this could be a good bet, even if it’s a 5x or a 10x, will be great.
This is a suggestion/prediction for a long term buy, no one can predict exact dates.
To ask a simple question – By the time DCB turns a 100 bagger, won’t HDFC and some other banks too ? Then why should we buy freaking DCB ?
I am also researching this stocks. HDFC Bank has market cap of Rs. 253,995.70 crores while DCB Bank has market cap of 3,018.94 crores. Because of smaller sixze it is easier for DCB to become multibaggers than HDFC Bank.
can we have the latest update and review on DCB
HDFC Bank and ICICI Bank are large caps and are also discovered stocks covered by many analysts; whereas DCB Bank is a relatively new entrant and has potential for growth. And once it starts gaining size there will be lot of so called analysts coming out with buy reports.
Another point is that size is not an advantage in the banking sector; look at what is happening to ICICI Bank, SBI and the other large PSU banks with all the bad debts.
I think DCB and IDFC Bank could be good picks.
What about dcb bank loosing steam. Kindly advise