DCB Bank Downgraded to 'Sell' by MarketsMOJO, Technical Factors Indicate Potential Downward Trend

DCB Bank, a smallcap private bank, has recently been downgraded to a 'Sell' by MarketsMOJO on August 6, 2024. This downgrade is based on the company's flat results in the June 2024 quarter, with its PBDIT (Q) at a low of Rs 62.37 crore and operating profit to net sales (Q) at a low of 4.19%. Additionally, the PBT less OI (Q) was also at its lowest at Rs 33.98 crore.
Technically, the stock is in a mildly bearish range and the trend has deteriorated from sideways on August 6, 2024. The MACD and Bollinger Band technical factors are also bearish, indicating a potential downward trend for the stock.

In the past year, DCB Bank has underperformed the market with a return of only 0.17%, compared to the market's (BSE 500) return of 32.32%. However, the company has strong lending practices with a low gross NPA ratio of 3.33%.

Despite its attractive valuation with a price to book value of 0.7 and a ROA of 0.9, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has only generated a return of 0.17%, its profits have increased by 9.1%, resulting in a PEG ratio of 0.8.

It is worth noting that DCB Bank has a high institutional holding of 42.26%, indicating that these investors have better capability and resources to analyze the fundamentals of the company compared to most retail investors. Overall, with the recent downgrade and underperformance in the market, it may be wise for investors to consider selling their shares in DCB Bank.