Check Before You Invest : Dhanlaxmi Bank Ltd

BSE: 532180 NSE: DHANBANK ISIN: INE680A01011

| Sector: BFSI | Industry: Bank - Private

Snapshot

Q.1 Which industry/sub-sector does Dhanlaxmi Bank Ltd belong to?

Dhanlaxmi Bank Ltd belongs to the BFSI sector, operating specifically within the Bank - Private segment.

Q.2 Is Dhanlaxmi Bank Ltd a good quality company?

Dhanlaxmi Bank Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is Dhanlaxmi Bank Ltd undervalued or overvalued?

Dhanlaxmi Bank Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Dhanlaxmi Bank Ltd a good buy now?

Dhanlaxmi Bank Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Total Income growth is 9.53% for FY-2025, which is above its 5-year CAGR of 6.24%, indicating faster growth.

Q.2 Return on Assets of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Return on Asset is 0.4%, which is above its 5-year historical median of 0.3%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NIM%	2.84	2.84
PPOP%	37.68	-8.21
RoA%	0.4	0.3

Q.3 Return on Equity (ROE) of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Return on Equity is 6.3% for FY-2025, which is in line with its 5-year historical median of 6.3%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 37.68% for FY-2025, which is above its 5-year median(-8.21%), indicating increasing margins.

Q.5 Net Interest Margin of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 2.84% for FY-2025, which is in line with its 5-year median( 2.84%), indicating stable margins.

Q.6 Total Asset growth of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Total Asset growth is 12.37% for FY-2025, which is above its 5-year CAGR of 7.9%, indicating faster growth.

Q.7 Cost to Income ratio of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 85.4% for FY-2025, is higher its historical 5-year median of 81%, indicating improved cost management.

Q.8 Capital Adequacy ratio of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Capital Adequacy ratio (CAR) is 16.1% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of Dhanlaxmi Bank Ltd?

Dhanlaxmi Bank Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.98% for FY-2025, which is below its 5-year median 5.19%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.99% which is below its 5-year median( 1.25%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Dhanlaxmi Bank Ltd?

Promoters hold 0.00% of the Dhanlaxmi Bank Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Dhanlaxmi Bank Ltd vs Industry Peers?

Dhanlaxmi Bank Ltd AUM CAGR is 7.9%, compared to the 5-year industry median CAGR of 12.74%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of Dhanlaxmi Bank Ltd vs industry peers

Dhanlaxmi Bank Ltd profit metrics are in line with the industry median level of 7.71%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM%	2.84	3.71
PPOP%	37.68	18.38
RoA%	0.4	1.05

Q.3 Operating efficiency of Dhanlaxmi Bank Ltd vs industry peers?

Dhanlaxmi Bank Ltd Cost to Income (78.2) is above the industry median of (61.45); while the current ROE (6.3) are below than the 5-year average Industry ROE (12.3). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM%	2.84	3.71
PPOP%	37.68	18.38
RoA%	0.4	1.05
Cost to Income%	85.4	61.45
ROE%	6.3	12.3

Valuation & price assessment

Q.1 Stock return of Dhanlaxmi Bank Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 7.8% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	7.8%	22.5%	32.1%	13.7%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	11.82	12.59	13.38
Price to Book	0.93	0.74	1.37
Price to Sales	0.76	0.62	1.77
EV to EBITDA	1.95	2.13	7.70

Q.4 Valuation ratios of Dhanlaxmi Bank Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 0.93% is higher than its historical median of 0.74%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Dhanlaxmi Bank Ltd return on invested capital (ROIC) is 44.61% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

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