Dhanlaxmi Bank is one of the oldest mid-size private sector banks in India with a pan-India presence
through a network of 260 branches, 371 ATMs covering 680 centers across 15 states. As on
March 31, 2017, the bank had total deposits at Rs. 11294 crores with advances at Rs. 6596 crores
and an asset base of Rs. 12333 crores. DBL has a well-diversified product basket and is present
across the Personal Banking, Corporate Banking, NRI Banking, Micro & Agri Banking, SME Bankingand other financial planning verticals.
DBL strengths is its number of customers, scale of business,breadth of product offerings, banking experience the bank offers and the trust that customershave in the bank.DBL reported a turnaround result with PAT of Rs 12.38 crores (FY16:Rs 209.45crores losses) in FY17 after three consecutive years of net losses. The bank also reported a 9%growth in Net Interest Income (NII) totaling Rs 331.60 crores as compared to Rs 304.68 crores last year.
Further the bank reported a healthy improvement in the cost to income ratio which resulted in
the operating profits moving up to Rs 96.37 crores as compared to an operating profit of just Rs
3.28 croreslast year. Also GNPA has also reduced to 4.78% in FY17 from a peak level of 7% in
FY15 and around 6.36% last year.
The NNPA stands at 2.58% as on FY17 as compared to 2.78%last year. Worst of asset quality is behind and management sounds more confident than before in the preceding three quarters with excellent profits.
Sharmila Joshi of sharmilajoshi.com told CNBC-TV18, "Dhanlaxmi Bank is a hold at this level. I think that given everything that is happening in banking with recapitalisation and so much talk of consolidation etc, I think Dhanlaxmi Bank could be one of the banks that is looked at and if the financials also improve, it will be even more attractive. So I would have a target of closer to Rs 45-47 on the stock and at current levels I would continue to hold."
The share touched its 52-week high Rs 44.70 and 52-week low Rs 22 on 17 May, 2017 and 27 December, 2016, respectively.
DBL - a strong takeover candidate currently trades at 1.18x P/BV on FY18 and 1.05x P/BV FY19 which look attractive from a long term perspective considering the banks size and long term prospects. Accumulate for excellent double digit returns in one to two years' time with limited downside.
No comments:
Post a Comment