This private lender, a consensus 'buy' among analysts, just saw its best day in nearly four years

Shares of DCB Bank Ltd. gained as much as 13.5% on Monday, October 20, in response to its September quarter results. This is the biggest single-day gain for the stock since April 2022.

The company reported a 17% growth in its core Net Interest Income (NII) to ₹596 crore from ₹509 crore it reported during the same quarter last year.

Net profit for the period increased by 19% from last year to ₹184 crore, while provisions nearly halved on a sequential basis.

The key reasons behind the surge in stock price were two important factors. Credit Costs during the quarter declined sharply during the quarter, to 0.31% from 0.59% during the June quarter. The bank was projecting credit costs to be between 45 to 55 basis points.

Net Interest Margins (NIMs) during the quarter expanded by 3 basis points to 3.23% despite pressures arising from the rate cuts by the Reserve Bank of India. The aim is for margins to be between 3.5% to 3.65%.

All 22 analysts having coverage on DCB Bank have a "buy" rating on the stock. Consensus estimates of price targets are implying a potential upside of 15.6% from current levels.

Shares of DCB Bank are currently trading 12.5% higher at ₹145.1. With this move, the stock has extended its year-to-date advance to 20%.