Dhanlaxmi Bank (DHANBANK)
TurnaroundFairStock Score: 40/100 — MIXED
Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹32.34 |
| Market Cap | ₹1,276.46 Cr |
| P/E Ratio | 11.08 |
| ROCE | 5.47% |
| ROE | 7.92% |
| Dividend Yield | 0% |
| Profit Growth | 103.2% |
| Debt/Equity | — |
| Sales Growth | 25% |
| Promoter Holding | 0% |
| 52-Week Range | ₹19.45 — ₹36.85 |
| Sector | Banks |
| Book Value | ₹38.27 |
Strengths
- Trades almost at book value: price ₹26.98 vs book value ₹26.76
- Piotroski F-Score 7/9 points to decent financial health
- Sales and profit both growing around 20% on a small base
- P/E of 10.67 and PEG of 0.51 are optically cheap
- Recent quarterly profitability provides some earnings support
Concerns
- Zero promoter holding means no skin in the game for insiders
- ROE of 8.36% and ROCE of 5.47% are below what a quality bank should earn
- No dividend signals limited shareholder return
- Net profit of ₹24 Cr on revenue of ₹407 Cr shows a thin, fragile margin
AI Analysis
At ₹26.98, Dhanlaxmi Bank sells for almost exactly one times book value of ₹26.76, and the P/E is 10.67. That looks cheap, but I have learned that cheap can be a trap if the business does not earn good returns. ROE is just 8.36% and ROCE is 5.47% — proof this is not a wonderful franchise. A bank deserving my capital should generate double-digit returns on equity without excessive risk. Growth is real: sales rose 21.66% and profit rose 20.30%; the latest quarter shows ₹407 Cr revenue and ₹24 Cr profit. Net margin is roughly 6%, so earnings remain thin. A PEG of 0.51 suggests the market is not pricing in much growth, but perhaps the market is right because the quality of that growth and the loan book are unknown. The Piotroski F-Score of 7/9 gives some comfort about financial health, but I cannot ignore the complete absence of promoter holding. With zero insider ownership and no dividend, I am relying entirely on managers with little skin in the game. That is a red flag. I am not buying this as a growing compounder. I would treat it as a possible turnaround or asset play, provided asset quality is clean and management can earn closer to 12-15% ROE. At one times book, you are paying a fair price for an average bank; the edge exists only if the bank improves. A FairStock Score of 40/100 is mixed, and I agree.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer