DCB Bank Q3 FY26 – ₹703 Cr PAT, 0.99× Book, GNPA 2.72% – A Small Bank Acting Like a Grown-Up While the Market Still Treats It Like a Toddler

1. At a Glance – Blink and You’ll Miss the Undervaluation

DCB Bank is currently trading at ₹183, rocking a market cap of ₹5,883 crore, a P/B of 0.99, and a P/E of 8.37. In a market where private banks happily trade at 2–4× book while crying about asset quality, DCB is sitting quietly like the topper who doesn’t raise his hand.

In Q3 FY26, the bank reported PAT of ₹185 crore, up ~22% YoY, while advances grew ~18% and deposits ~20%. Gross NPA cooled further to 2.72%, Net NPA to 1.10%, and yet the market response was… a yawn.

Three-month return: +16%
Six-month return: +32.6%
One-year return: +58.5%

So the stock has moved, but valuation hasn’t caught up. Why? Because DCB is neither flashy like a fintech nor massive like HDFC. It’s a boring banker doing disciplined lending — and the market historically hates discipline.

But here’s the fun part: disciplined banking + sub-1× book rarely stays ignored forever.
Question is — is this a coiled spring or a value trap with good manners?

2. Introduction – The Bank That Refused to Do Stupid Things

DCB Bank was incorporated in 1995 after morphing from a cooperative bank into a full-fledged private sector bank. That origin story matters — because it explains why DCB behaves like a conservative uncle at a family wedding while others are dancing to leverage.

This is not a bank that chased corporate lending glory and then cried during NPA cycles. Nor did it YOLO into unsecured retail just because fintech influencers were shouting on Twitter. DCB built its book slowly — mortgages, MSMEs, agri, inclusive banking — boring stuff that actually gets repaid.

Over the last decade, revenue has compounded at ~16%, profits at ~12%, and ROE has stubbornly stayed around 10–11%. No fireworks. No disasters. Just steady execution.

But markets don’t reward “steady”