DCB Bank is down in the red post its earnings for Q2FY20 – its profitability improved but its asset quality dropped and that is a big no-no for the markets, especially in these highly uncertain times.
The stock price dropped 7.5% to Rs.168; it has recovered a bit to Rs.174 levels but remains in the red. It has a 20% LC and it stands today at Rs.145.05. So the market is perturbed about the asset quality but not so worried that it pummeled the stock price to pulp.
Thanks to a 11% (YoY) rise in NII at Rs.313 crore, 38% jump in other income at Rs.101 crore, DCB’s net profit showed a 24% increase in net profit at Rs.91 crore.
In terms of asset quality, Gross NPA rose from 1.96% to 2.09% (QoQ) while Net NPA was also up from 0.81% to 0.96%.
Its provisions and contingencies were up 6.5% (QoQ) and up 36% (YoY) at Rs.43 crore.