DCB Bank (DCBBANK)

FairStock Score: 50/100 — MIXED

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Attractive valuation: P/E of 8.49 and P/B of 1.16 versus trailing ROE of 13.14%.
• Profit growth of 21.99% is nearly double revenue growth of 11.36%, giving a PEG of 0.51.
• Piotroski F-Score of 7/9 points to solid recent financial health.
• Book value of ₹164.93 provides a tangible floor, with price just 16% above book.

Concerns

• ROE of 13.14% and ROCE of 7.67% suggest a modest, not exceptional, banking franchise.
• Promoter holding of 16.24% is low, raising questions about owner alignment.
• Dividend yield of 0.73% is thin, so investors depend entirely on growth or re-rating.
• Profit growth exceeding sales growth may be less durable if driven by one-time efficiency or provision reversals.

AI Analysis

I judge a bank first by its capital discipline and second by its earnings power. At ₹191.75, DCB Bank trades at 8.49 times earnings and 1.16 times book value of ₹164.93. That gives me an earnings yield of about 11.8%, and a price only 16% above book. Graham taught me to look for a margin of safety; this price starts with one. The financial health is encouraging: Piotroski score of 7/9 is strong, and profit growth of 21.99% is running nearly double the sales growth of 11.36%. A PEG of 0.51 suggests the market is pricing in low odds of continued growth. That being said, I do not see a wide moat. A 13.14% ROE is respectable but hardly the hallmark of a fortress bank; ROCE of 7.67% reinforces my sense that this is an average profitability business, not a franchise with dominant pricing power. The low dividend yield of 0.73% means the return must come from growth or re-rating. Promoter holding of 16.24% is also thin for an Indian private-sector lender; I prefer owners who eat their own cooking. FairStock Score of 51/100 matches the mixed picture: cheap and growing, but not exceptional. I would call this a fast grower selling at a value price. If management keeps compound profit growth near 20% and lifts ROE, the current multiple will look very conservative. If growth slips to single digits, the bank risk remains, and low ownership will make me question the steward's intention. I'd hold it small, watch quarterly trends, and demand that book value keeps rising year after year.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer