DCB Bank advanced 1.63% to Rs 115, amid some bit of value-buying.
The stock had declined 1.74% in the past two sessions to end at Rs 113.15 on the BSE yesterday, from its recent closing high of Rs 115.15 recorded on 20 February 2023.
In the past one year, the stock has zoomed 59.03% while the benchmark Sensex had risen by 4.42% during the same period.
On the technical front, the stock's daily RSI (relative strength index) stood at 46.852. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.
On daily chart, the stock is trading below its 50-day and 100-day simple moving average (SMA) placed at 120.78 and 118.17, respectively. It has, however, managed to trade above its 200-day SMA positioned at 103.
In an exchange filing made yesterday, DCB Bank said that the credit rating agency ICRA has reaffirmed its credit rating "ICRA A+ (Positive), outlook revised to positive from stable' for the Basel-III complaint tier-II bonds programme of Rs 13.40 crore.
The agency has also reaffirmed its credit rating ICRA A1+ on the short-term fixed deposit programme of the bank.
The revision in the outlook on the long-term rating of DCB Bank (DCB) factors in the improvement in its asset quality with the vulnerable book (special mention account (SMA)-1, SMA-2 and standard restructured book under moratorium) declining gradually.
This book, however, remains a near-to-medium-term monitorable as the restructured book is yet to fully exit the moratorium. ICRA also takes note of the well-collateralised loan book and DCB's ability to enforce collateral, leading to lower net slippages.
As a result, the headline asset quality metrics continue to improve with low credit costs. Furthermore, the ratings continue to factor in the bank's strong capital cushions while deposit granularisation has continued to progress satisfactorily.
DCB has provided guidance of doubling the book over the next 3-4 years, which may lead to operational leverage over the long term. However, the operating expenses necessary for expanding the franchise are likely to remain high in the near term.
Additionally, the bank's ability to match the book growth by mobilising deposits at competitive rates amid rising interest rates and tighter liquidity conditions, thereby narrowing the differential with the private sector average while sustaining granularity, will remain key for building a stable franchise and better cost metrics.
The "positive' outlook factors in ICRA's expectation that DCB will be able to maintain its headline asset quality and profitability metrics while reducing the vulnerable book and pursuing growth.
DCB Bank is a private sector bank. It had a network of 418 branches and 385 ATMs as on 31 December 2022.
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