At the current market price of Rs. 134.40, the stock P/E ratio is at 17.67 x FY16E and 15.81 x FY17E respectively.

1. CMP 134.40
Target Price 155.00
ISIN: INE503A01015
JULY 17th
, 2015
DCB BANK LIMITED
Result Update (PARENT BASIS): Q1 FY16
BUYBUYBUYBUY
Index Details
Stock Data
Sector Banking
BSE Code 532772
Face Value 10.00
52wk. High / Low (Rs.) 150.90/76.30
Volume (2wk. Avg. in Mn) 466000
Market Cap (Rs. in mn.) 38024.45
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Interest Earned 14224.22 16414.75 18384.52
Total Income 15881.38 18492.83 20784.70
Net Profit 1911.84 2152.12 2404.94
EPS 6.78 7.61 8.50
P/E 19.83 17.67 15.81
Shareholding Pattern (%)
1 Year Comparative Graph
DCB BANK LTD BSE SENSEX
Highlights
DCB Bank Ltd is the only co-operative bank in India to
have been converted into a private sector commercial
bank in 1995, reported 1st quarter of FY16 results with
Net Interest Income and Net Profit rising by 14.80% &
4.99% YOY respectively.
Total Interest Earned for the 1st quarter of FY16 was at
Rs. 4043.20 mn, an increase of 14.80% y-o-y as against
Rs. 3521.99 mn in the corresponding quarter of
previous year.
Net Interest Margin for Q1 FY 2016 stands at 3.81% as
against 3.71% for Q1 FY 2015.
Net profit of IndusInd Bank stood at Rs. 468.70 mn
against Rs. 466.42 mn in the corresponding quarter of
the previous year, grown by 4.99% y-o-y.
In Q1 FY16, Net Interest Income stood at and stood at
Rs. 1403.80 mn against Rs. 1389.76 mn in same period
of the previous year.
Total Deposits as on June 30th, 2015 was at Rs.
132690.00 mn over corresponding quarter of the
previous year, grown by26%.
The Bank’s Capital Adequacy Ratio was at 14.27% with
Tier I at 13.56% and Tier II at 0.71% as per Basel III as
on June 30, 2015.
As on June 30th, 2015, the Balance Sheet was at Rs.
163100.00 mn as against Rs.128840.00 mn as on June
30, 2014, a growth rate of 27%.
Bank’s branch network increased from 134 branches
to 157 branches in 106 locations as on June 30, 2015.
Net Income and PAT or Net Profit of the company is
expected to grow at a CAGR of 18% and 17% over
2014 to 2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
DCB BANK Ltd 134.40 38024.45 6.78 19.83 2.47 0.00
City Union Bank Ltd. 101.80 60838.20 6.61 15.40 3.00 110.00
Dena Bank Ltd 44.20 24802.80 4.73 9.34 0.33 9.00
Lakshmi Vilas Bank Ltd 93.30 16726.00 7.38 12.64 1.13 20.00

2. COMPANY PROFILE
DCB Bank Ltd is a modern emerging new generation private sector bank with 157 branches across 17 states and
2 union territories. It is a scheduled commercial bank regulated by the Reserve Bank of India. It is professionally
managed and governed. DCB Bank has contemporary technology and infrastructure including state of the art
internet banking for personal as well as business banking customers. DCB is the only co-operative bank in India
to have been converted into a private sector commercial bank in 1995. Strong presence in Andhra Pradesh,
Gujarat and Maharashtra resulting in sticky customer deposits from traditional customers. New branch
expansions in Madhya Pradesh, Odisha, Punjab, Rajasthan.
DCB Banks business segments are Retail, micro-SMEs, SMEs, mid-Corporate, Microfinance Institutions (MFI),
Agriculture, Commodities, Government, Public Sector, Indian Banks, Co-operative Banks and Non Banking
Finance Companies (NBFC). DCB Bank has approximately 500,000 customers. This Bank has deep roots in India
since its inception in 1930s. Its promoter and promoter group the Aga Khan Fund for Economic Development
(AKFED) & Platinum Jubilee Investments Ltd. holds over 16% stake. AKFED is an international development
enterprise. It is dedicated to promoting entrepreneurship and building economically sound companies.
Products and Services
Retail Banking
• Deposit Products
Current and Savings
Term Deposits
NRI Deposits
Corporate Salary
POS Terminals
Lockers
• Wealth Management
Mutual Funds
Life Insurance and General Insurance
Services
24/7 Phone Banking
Any Branch Banking
• Cards
ATM Card
Debit Card
Gift Card
Secured Card
Credit Card*
Co-branded Prepaid Card**
• Payments
Remittances
Bill / Utility Payments
RTGS / NEFT
On-line Share Trading/Demat
Tax Payments
Visa Money Transfer
• Loans
Auto Loans*
Commercial Vehicle*
Construction Equipment*
Gold Loans
Home Loans
Loan Against Property
Loan Against Shares
Tractor Loans

3. • Privilege Banking
• Internet Banking
• Mobile Banking
Treasury, NBFCs, Co-operative Banks
Statutory Reserves Management
Liquidity Management
Trading in Government Securities
Foreign Exchange
Corporate Bonds
CDs
Equity Investment
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Q1 FY16
The bank mainly focuses on Retail Deposits (Term, CASA) for funding and also focuses on branch expansion in
Tier 2 to Tier 6. Grow Retail Mortgages, MSME, SME, Commercial Vehicle, Tractors, Gold Loans, mid-Corporate
and Agri Loans. Create a diversified portfolio. Limit unsecured lending and lumpy exposures.
Total interest earned rose by 14.80% YOY at Rs. 4043.20 mn in Q1 FY16 when compared to Rs. 3521.99 mn in
corresponding June quarter of previous year. Provisions and contingencies stood at Rs. 180.30 mn compared to
Rs. 229.31 mn in the June quarter. Other income grew by 82.99% and stood at Rs. 631.20 mn in Q1 FY16. Net
Interest Income, one of the main criteria of profitability of the bank rose by 1.01% YOY at Rs. 1403.80 mn. Net
profit of IndusInd Bank stood at Rs. 468.70 mn against Rs. 446.42 mn in the corresponding quarter of the
previous year.
Asset Quality
(In Rs. Million) Jun-15 Jun-14 % Change
Total Interest Earned 4043.20 3521.99 14.80%
Other Income 631.20 344.94 82.99%
Provisions & contingencies 180.30 229.31 (21.37)
NII 1403.80 1389.76 1.01%
Net Profit 468.70 446.42 4.99%
Rs. In Mn As on 30-6-2015 As on 30-6-2014
%
Change
Amount of Gross NPAs 2064.10 1491.90 38
Amount of Net NPAs 1270.40 804.50 58
% of Gross NPAs 1.96 1.78 18 BP
% of Net NPAs 1.22 0.97 25 BP

4. Segment Revenue
Retail banking revenues rose by 29% to Rs. 1854.10 mn when compared to Rs. 1434.90 mn in the previous June
quarter. In Q1 FY16, Revenues from Treasury segment increased by 29% to Rs. 1854.10 mn. Whereas in Q1
FY16, Wholesale banking increased by 8% to Rs. 973.20 mn over the corresponding quarter of the previous year.
Other business grown by 77% y-o-y of Rs. 28.70 million in Q1 FY16.
Performance highlights for the Quarter ended June 30, 2015
• CASA (Current Accounts- Savings Accounts) Ratio is at 23% as on June 30, 2015 compared to 25% in the
corresponding quarter of the previous year.
• As on June 30th 2015, Net Advances grew to Rs. 104260.00 mn from Rs. 82910.00 mn over the same period of
previous year, registered a growth of 26 %.
• Net Interest Margin for Q1 FY 2016 stands at 3.81% as against 3.71% for Q1 FY2015.
• Total Deposits as on June 30th, 2015 was at Rs. 132690.00 mn over corresponding quarter of the previous
year, grown by26%.
• The Bank’s Capital Adequacy Ratio was at 14.27% with Tier I at 13.56% and Tier II at 0.71% as per Basel III
as on June 30, 2015.
• The Bank’s branch network increased to 157 branches (from 134 branches) in 106 locations as on June 30,
2015.
• As on June 30th, 2015, the Balance Sheet was at Rs. 163100.00 mn as against Rs.128840.00 mn as on June 30,
2014, a growth rate of 27%.
(In Rs. Millions) Q1 FY16 Q1 FY15 Chng %
Treasury Operations 1854.10 1434.90 29
Wholesale Banking 973.20 902.30 8
Retail Banking 3586.00 2769.30 29
Other business 28.70 16.20 77

5. FINANCIAL SATEMENTS & ESTIMATIONS (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as on 31st March, 2014 -2017E
INDUSIND BANK LTD FY14A FY15A FY16E FY17E
CAPITAL AND LIABILITIES
Capital 2503.25 2820.12 2829.20 2829.20
Employee Stock Options Outstanding 29.65 31.99 34.04 35.40
Reserves and Surplus 9006.70 13033.64 14671.66 17076.60
Deposits 103251.60 126091.27 149039.88 171395.86
Borrowings 8601.60 11637.96 13500.03 15120.04
Other Liabilities and Provisions 5838.57 7708.10 9712.21 11460.40
Total Liabilities 129231.37 161323.08 189787.02 217917.50
ASSETS
Cash and Balances with Reserve Bank of India 5050.69 6336.83 7819.65 9493.05
Balances with Banks and Money at Call and Short notice 1845.02 854.94 966.08 1072.35
Investments 36342.23 44705.64 52165.46 59051.30
Advances 81401.86 104650.60 123801.66 143039.52
Fixed Assets 2386.42 2366.75 2423.55 2457.48
Other Assets 2205.15 2408.32 2610.62 2803.80
Total Assets 129231.37 161323.08 189787.02 217917.50
Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14A FY15A FY16E FY 17E
Description 12m 12m 12m 12m
Interest Earned 11282.59 14224.22 16414.75 18384.52
Other Income 1386.63 1657.16 2078.08 2400.18
Total income 12669.22 15881.38 18492.83 20784.70
Interest Expended -7598.70 -9141.98 -10751.66 -12078.63
Gross Interest Income 5070.52 6739.40 7741.17 8706.07
Operating Expenses -3190.87 -3964.93 -4645.37 -5239.59
Operating Profit 1879.65 2774.47 3095.79 3466.48
Provisions and Contingencies -365.64 -694.17 -715.13 -797.29
Profit Before Tax 1514.01 2080.30 2380.66 2669.19
Tax -0.40 -168.46 -228.54 -264.25
Profit After Tax 1513.61 1911.84 2152.12 2404.94
Equity Capital 2503.25 2820.12 2829.20 2829.20
Reserves 8480.75 12519.54 14671.66 17076.60
Face Value (Rs.) 10.00 10.00 10.00 10.00
EPS 6.05 6.78 7.61 8.50

6. Quarterly Profit & Loss Statement for the period of 31st Dec, 2014 to 30th Sep, 2015E
Value(Rs. mn) 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15
Description 3m 3m 3m 3m
Interest Earned 3565.06 3788.45 4043.20 4107.89
Other Income 479.89 462.73 631.20 559.24
Total income 4044.95 4251.18 4674.40 4667.13
Interest Expended -2346.01 -2491.71 -2639.40 -2702.99
Gross Interest Income 1698.94 1759.47 2035.00 1964.14
Operating Expenses -1015.25 -1079.43 -1138.40 -1166.64
Operating Profit 683.69 680.04 896.60 797.50
Provisions and Contingencies -184.23 -143.16 -180.30 -191.00
Profit Before Tax 499.46 536.88 716.30 606.50
Tax -74.42 92.58 -247.60 -67.93
Profit After Tax 425.04 629.46 468.70 538.57
Equity Capital 2814.93 2820.12 2829.20 2829.20
Face Value (Rs.) 10.00 10.00 10.00 10.00
EPS 1.51 2.23 1.66 1.90
Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 6.05 6.78 7.61 8.50
Operating Profit Margin (%) 16.66% 19.51% 18.86% 18.86%
PAT Margin (%) 13.42% 13.44% 13.11% 13.08%
P/E Ratio (x) 22.23 19.83 17.67 15.81
ROE (%) 13.78% 12.46% 12.30% 12.08%
ROCE (%) 1.53% 1.81% 1.72% 0.93%
Debt-Equity Ratio 10.18 8.98 9.29 9.37
Book Value (Rs.) 43.88 54.39 61.86 70.36
P/BV (x) 3.06 2.47 2.17 1.91

7. Charts
OUTLOOK AND CONCLUSION
At the current market price of Rs. 134.40, the stock P/E ratio is at 17.67 x FY16E and 15.81 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.7.61 and Rs.8.50
respectively.
Net Income and PAT or Net Profit of the company is expected to grow at a CAGR of 18% and 17% over 2014
to 2017E respectively.
Price to Book Value of the stock is expected to be at 2.17 x and 1.91 x respectively for FY16E and FY17E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs. 155.00 for Medium to Long term
investment.

8. INDUSTRY OVERVIEW
According to the Reserve Bank of India (RBI), the banking sector in India is sound, adequately capitalised and
well-regulated. Indian financial and economic conditions are much better than in many other countries of the
world. Credit, market and liquidity risk studies show that Indian banks are generally resilient and have
withstood the global downturn well.
With a sense of optimism slowly creeping in, the banking industry expects that 2015 will bring better growth
prospects. This optimism stems from factors such as the Government working hard to revitalise the industrial
growth in the country and the RBI initiating a number of measures that would go a long way in helping the banks
to restructure. The recent announcements of RBI, it is felt, are a clear pointer to the future of the restructured
domestic banking industry.
Market Size
The Indian banking sector is fragmented, with 46 commercial banks jostling for business with dozens of foreign
banks as well as rural and co-operative lenders. State banks control 80 percent of the market, leaving relatively
small shares for private rivals.
At the end of February, Rs 137.00 mn accounts had been opened under Pradhanmantri Jan Dhan Yojna (PMJDY)
and Rs. 122.00 mn RuPay debit cards were issued. These new accounts have mobilised deposits of Rs 126940.00
mn (US$ 2.01 billion).
Standard & Poor’s estimates that credit growth in India’s banking sector would improve to 12-13 per cent in
FY16 from less than 10% in the second half of CY14.
Investments/developments
• The United Economic Forum (UEF), an organisation that works to improve socio-economic status of the
minority community in India has signed a memorandum of understanding (MoU) with Indian Overseas Bank
(IOB) for financing entrepreneurs from backward communities to set up businesses in Tamil Nadu.
• In a major boost for the infrastructure sector, as well as for banks financing long gestation projects, the RBI
has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing
ones where the total exposure of lenders is more than Rs 5000.00 mn (US$ 78.98 million).
• RBI governor and European Central Bank President has signed an MoU on cooperation in central banking.
“The memorandum of understanding provides a framework for regular exchange of information, policy
dialogue and technical cooperation between the two institutions.

9. • RBL Bank has announced that it would be the anchor investor in Trifecta Capital’s Venture Debt Fund, the
first alternative investment fund (AIF) of its kind in India with a commitment of Rs 500.00 mn.
• Bandhan Financial Services Pvt. Ltd has raised Rs 16000.00 mn (US$ 252.69 million) from two international
institutional investors to help convert its microfinance business into a full service bank. Bandhan was one of
the two entities to get a banking licence in April 2014 along with infrastructure finance company IDFC Ltd.
• Yes Bank Ltd has signed an MoU with the US government’s development finance institution Overseas Private
Investment Corp (OPIC) to explore US$ 220 million of financing to lend to micro, small and medium
enterprises (MSMEs) in India.
• Reliance Industries Limited (RIL) has said that it has applied for a Payments Bank licence, where the
company will be the promoter and State Bank of India will be its joint venture partner with an equity
investment of up to 30 per cent.
• The RBI has allowed bonds issued by multilateral financial institutions like World Bank Group, the Asian
Development Bank and the African Development Bank in India as eligible securities for interbank borrowing.
The move will further develop the corporate bonds market, RBI said in a notification.
• The Competition Commission of India (CCI) has cleared the merger of ING Vysya Bank with Kotak Mahindra
Bank, which would create the country's fourth largest private sector lender.
Government Initiatives
The Government has announced a capital infusion of Rs 69900.00 mn (US$ 1.1 billion) in nine state run
banks, including State Bank of India (SBI) and Punjab National Bank (PNB), but based on new efficiency
parameters such as return on assets and return on equity. In a statement, the finance ministry said, “This
year, the Government of India has adopted new criteria in which the banks which are more efficient would
only be rewarded with extra capital for their equity so that they can further strengthen their position."
The Union cabinet has approved the establishment of the US$ 100 billion New Development Bank (NDB)
envisaged by the five-member BRICS group as well as the BRICS “contingent reserve arrangement” (CRA).
The RBI has decided to allow nominated banks to import gold, including coins, on a consignment basis,
extending its clarification issued in November 2014, which had eased certain categories of gold imports.
To help Micro Small and Medium Enterprises (MSME), RBI has permitted setting up of an exchange-based
trading platform to facilitate financing of bills raised by such small entities to corporate and other buyers,
including government departments and PSUs.

10. Road Ahead
The Indian economy is now on the threshold of a major transformation, with expectations of policy initiatives
being implemented. Positive business sentiments, improved consumer confidence and more controlled inflation
should help boost the economic growth. Higher spending on infrastructure, speedy implementation of projects
and continuation of reforms will provide further impetus to growth. All this translates into a strong growth for
the banking sector too, as rapidly growing business turn to banks for their credit needs, thus helping them grow.
Also, with the advancements in technology, mobile and internet banking services have come to the fore. Banks in
India are focusing more and more to provide better services to their clients and have also started upgrading their
technology infrastructure, which can help improve customer experience as well as give banks a competitive edge.
Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-less credit and debit
cards in the market soon. The cards, which use near field communication (NFC) mechanism, will allow customers
to transact without having to insert or swipe.
Disclaimer:
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purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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