DCB

Macro
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In the private banking sector, banks have grown -6.5% to 68% yoy - DCB is -26% yoy
Baking will get hit after budget as banks will be forced to reduce interest rates. This will put DCB’s margins further under pressure.
Further, since DCB is in developed states, people are now taking money out of saving accounts and putting it in stock markets again.
At the same time, more people will be provided credit with improving economy, so some improvement in fee/interest income, but here DCB will have to win compete with other banks.

Fundamental/Competition
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DCB has a PE of 2.4, book value per share is 36. EPS of 18
Profit margin of 5% and ROE 6% which are not very good.
Fitch recently downgraded DCB to BBB (Feb).
The bank’s net profit in Q390 dipped to -3.5 cr vs 25.5 cr in Q308.

Any new JV, marketing/business development strategy?
How are they handling NPAs – reducing unsecured personal loans gradually.
With lower margins, DCB needs to grow the business and scale up. Currently 80 branches. Good point is its getting started in the secured lending business at a time when most banks are hesitant to take further exposure.

F&O
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Increase in open interest by 0.3%
Near month Futures trading at 42.30 (1.3% premium).

Technical
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5 day sma - 43.5
50 day sma – 29.8
200 day sma – 28.8

Chart
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3 month chart - showing 2nd phase of Elliott wave, price just crossed 10 day sma
MACD became negative (so am going reverse momentum)