Systematix Shares and Stocks (India) in a technical note on Tuesday suggested buying DCB Bank shares for near-term upside. Noting that DCB Bank had witnessed a healthy correction of nearly 20 per cent from its recent high of Rs 151, retracing to the crucial support zone near Rs 128-Rs 129, the brokerage said the scrip is on a recovery path now.
“Notably, the stock has taken strong support at the 61.8 per cent Fibonacci retracement level, calculated from the swing low of Rs 101 to the high of Rs 151. This retracement zone is often considered a golden pocket for reversals, and the recent price action validates the strength of this support,” Systematix said,
From a technical perspective, DCB Bank has given a decisive breakout from a well-defined Cup and Handle pattern at Rs 127.50, which is a classic bullish continuation setup. The breakout, Systematix said, is accompanied by above-average volumes, adding conviction to the move.
“Further, the stock has closed above its 200 DMA, signalling a strong shift in trend and reinforcing bullish momentum. Adding to the positive outlook, the price has registered a close above the upper band of the Bollinger Bands, indicating a volatility breakout.
As long as the stock holds above Rs 124, Systematix believes DCB Bank Ltd is likely to move toward Rs 134 and potentially Rs 139 in the near term. YES Securities has ‘Add’ rating and a target price of Rs 140 on the stock. Kotak Securities has ‘Buy’ rating on the stock with a target of Rs 160. Axis Securities also has a ‘Buy’ rating on the stock.
With demand visibility remaining strong in the target customer segment, along with the bank’s efforts to push growth in the higher-yielding segments, DCB Bank remains well-poised to drive healthy business growth, it said in an August note.
“The bank is well-poised to deliver an aspirational RoA of 1% by FY27, supported by (1) Steady to improving NIMs, (2) Strengthening Fee income profile, (3) Gradual Moderation in Opex ratio with improved efficiency and productivity, and (5) Range-bound credit costs,” Axis Securities said.
MOFSL said its FY26 and FY27 earnings growth estimates are broadly in line with consensus, though it is more optimistic for select mid-tier banks like such as DCB Bank and RBL Bank.