DCB Bank share price fell 20 per cent on Wednesday after the private sector lender reported a 10 per cent year-on-year fall in net profit figures to Rs 36.93 crore for the quarter (Q2) ended September 2015. The company posted net profit of Rs 41.09 crore in the corresponding quarter a year ago.
DCB share price slid to Rs 106.80 on Wednesday from Rs 133.45 on Tuesday and hit the lower circuit in today’s trading session.
According to market experts investors were also left disappointed after DCB Bank said it is looking to double its branches within 12 months to more than 300, adding over 150 branches against earlier plan of opening 25-30 branches a year.
Kotak Institutional Equities called it ‘a very dangerous, unexpected and disappointing shift’ in strategy. The brokerage house downgraded DCB Bank shares to ‘sell’ from ‘buy’ and cuts target price to Rs 100 from Rs 150 earlier.
Motilal Oswal also downgraded the stock to ‘sell’ from ‘buy’ and said the sudden shift in strategy is leading to sharp earnings cut and sees ROE falling below 10 per cent till FY17.
DCB Bank reported a 10 per cent fall in July-September net profit on higher provisions.
(With inputs from Reuters)