REPORT INSIDE

FINANCIAL RESULT ANALYSIS TRADING IDEA

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January 13, 2012

Analyst: Admin

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DCB Q3 RESULT ANLYSIS AND TRADING IDEA

January 13, 2012 Tepid growth story

PERFORMANE OVERALL RESULT

DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

SHAREPATI VIEW FLAT FLAT FLAT

COMPARING WITH MARKET EXPECTATION AT PAR ABOVE AT PAR

PROFITS SALES

Trading Idea
Recommendation AVOID

Recommendation date 13-01-2012 Current market price First Target Final Target Downside/Upside Time frame 41 35 10% 3 MONTHS

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Sharepatis View
Results announced by DCB are in line with market expectation, but we are not optimistic about this company in next three months. Interest Earned by the bank up by 3% on QOQ basis and 31% on YOY basis is not encouraging numbers.
DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

If one excludes other income out of total income, growth is nil Cost of interest paid on borrowing up by 3% on QOQ and 31% YOY this is the same negative story faced by whole banking industry. Control of employee cost is positive on QOQ basis Other operating expenses up 6% on QOQ basis, YOY basis it was up by 16%.overall expenses of the bank up marginally.

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The bank has not shown any tax figures in this result, which we expect the area which decrease in net profit further. Net profit up 15.64 crores, up by 17% on QOQ basis, while on YOY basis its profit up by 91% mainly because of low base effect of last year. Non Performing Asset dip by 20% on YOY basis, Eventhogh gross NPA dip by 20% we are seeing a its quality is not improving. This could be a main negative in next earnings.
DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

Return on asset is ok due to low base affect DCB has posted a muted performance in revenue segment. In corporate banking they have posted only 2% growth on QOQ basis and 5% growth on YOY basis. Management people are very much conservative in corporate banking, besides these treasury operations they have posted only 1% growth on QOQ basis, in retail and other banking business they posted only 2% QOQ growth overall revenue segment is not compelling for the investor right now.

In corporate banking they have earned a profit of Rs 1.53 crore which is -66% growth when compared to last corresponding year.

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In retail banking also numbers are discouraging because they have not shown any positives, It dip by massive -52% on QOQ basis and up 495% on negative base affect in last year. There was no branch expansions take place since last three months.

DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

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UNAUDITED FINANCIAL RESULTS FOR THE QUARTER DECEMBER 31, 2011 As at Interest Earned (a+b+c+d) Interest / Discount on advances / bills Income on Investments Interest on balances with Reserve Bank of India and Other Inter Bank Funds Others Other Income Total Income (1+2) Interest Expended Operating Expenses (i+ii) Employees cost Other Operating Expenses Total Expenditure (4+5) (excluding provisions and contingencies) Operating Profit before Provisions and Contingencies (3-6) Provisions (Other than tax) and Contingencies Exceptional Items Profit / (Loss) from Ordinary Activities before tax (7-8-9) Tax expense Net Profit / (Loss) from Ordinary Activities after tax (10-11) Extraordinary items (Net of tax expenses) Net Profit / (Loss) for the period (12-13) Q3- 2011 18,348.19 13,535.18 4,558.40 177.39 77.22 2,623.90 20,972.09 12,381.32 6,339.86 3,168.05 3,171.81 18,721.18 2,250.91 686.81 1,564.10 1,564.10 1,564.10 Q2 -2011 17,852.48 13,292.63 4,365.37 178.71 15.77 2,313.02 20,165.50 11,942.73 6,136.19 3,153.54 2,982.65 18,078.92 2,086.58 753.88 1,332.70 1,332.70 1,332.70 Q3-2010 14,021.87 10,471.45 3,482.56 67.86 2,601.42 16,623.29 9,091.19 5,467.61 2,731.89 2,735.72 14,558.80 2,064.49 937.56 1,126.93 310.00 816.93 816.93 CHANGES ON QOQ YOY 3% 31% 2% 29% 4% 31% -1% 161% 390% 13% 4% 4% 3% 0% 6% 4% 8% -9% 0% 1% 26% 36% 16% 16% 16% 29% 9% -27%

1 a. b. c. d. 2 3 4 5 i. ii. 6 7 8 9 10 11 12 13 14

DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

17%

39% -100% 91%

17%

17%

91%

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UNAUDITED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2011
Sr. No. Particulars For the nine months ended 31.12.2011 For the nine months ended 31.12.2010 CHANGES NINE MONTH

1 a. b. c. d. 2 3 4 5 i. ii. 6 7 8 9 10 11 12 13 14

DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

Interest Earned (a+b+c+d) Interest / Discount on advances / bills Income on Investments Interest on balances with Reserve Bank of India and Other Inter Bank Funds Others Other Income Total Income (1+2) Interest Expended Operating Expenses (i+ii) Employees cost Other Operating Expenses Total Expenditure (4+5) (excluding provisions and contingencies) Operating Profit before Provisions and Contingencies (3-6) Provisions (Other than tax) and Contingencies Exceptional Items Profit / (Loss) from Ordinary Activities before tax (7-8-9) Tax expense Net Profit / (Loss) from Ordinary Activities after tax (1011) Extraordinary items (Net of tax expenses) Net Profit / (Loss) for the period (12-13)

52,365.01 39,105.78 12,661.33 504.91 92.99 7,281.35 59,646.36 35,300.03 18,356.49 9,362.73 8,993.76 53,656.52 5,989.84 2,209.95 3,779.89 3,779.89 3,779.89

38,803.49 28,994.63 9,657.12 151.74 8,284.39 47,087.88 24,908.25 15,773.73 7,715.89 8,057.84 40,681.98 6,405.90 4,876.52 1,529.38 521.09 1,008.29 1,008.29

35% 35% 31% 233%

-12% 27% 42% 16% 21% 12% 32% -6% -55% 147% -100% 275%

275%

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Capital Adequacy Ratio

13.39 13.10 13.00

EPS
0.67 0.41 0.78

31.12.2010 30.09.2011 31.12.2011

31.12.2010 30.09.2011

31.12.2011

FALLING CAPITAL ADEQUACY RATIO

MARGINAL UP IN EARNING PER SHARE

DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

Percentage Gross NPAs to Gross Advances

7.05 5.75 5.67

Return on Assets (%)

0.68 0.47 0.77

31.12.2010 30.09.2011 31.12.2011

31.12.2010 30.09.2011 31.12.2011

NO IMPROVEMENTS IN NPA

STABILIZED RETURN ON ASSET

Overall its top line and bottom-line story is not encouraging. We believe that this stock can see a further downside if bank sector underperforms in next three months. We rate this stock as AVOID for investors.

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DCB Q3 RESULT ANLYSIS AND TRADING IDEA | 1/13/2012

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