Stock recommendations by Shrikant Chouhan, Kotak Securities
DCB Bank – Buy
CMP – ₹190
FV – ₹225
Resistance – ₹198/204
Support – ₹185/180
DCB Bank is a new-generation private-sector bank promoted by the Aga Khan Fund for Economic Development (AKFED), with a pan-India presence spanning 480 branches across the majority of states and union territories. The bank’s core identity is built around serving self-employed individuals, MSMEs, and the retail segment — a focused positioning that has historically yielded more predictable credit outcomes compared to mid-tier peers.
Geographical diversification: The branch network is well diversified, with Maharashtra leading at 17 per cent, followed by Odisha (11 per cent), Telangana (8 per cent), and Gujarat (7 per cent). Critically, the bank maintains meaningful rural and semi-urban penetration with 29 per cent of branches in urban locations and 25 per cent in semi-urban areas supporting its granular, secured lending thesis.
Product mix: The loan book is dominated by mortgages (39 per cent), with Agri and Inclusive Banking (AIB) at 23.5 per cent, co-lending at 14 per cent, and gold loans making up approximately 7 per cent. This secured, diversified mix dampens volatility and explains the bank’s consistently benign credit costs.
Q4FY26 performance: DCB delivered profit after tax (PAT) of ₹206 crore, up 16 per cent year-on-year (Y-o-Y), with advances growing 18 per cent and deposits surging 21 per cent. Net interest margins (NIM) improved meaningfully to 3.39 per cent, the highest in five quarters. Gross non-performing asset (NPA) fell to 2.45 per cent (from 2.99 per cent a year ago), with net NPA at a healthy 0.89 per cent. The provision coverage ratio strengthened to 78.42 per cent, providing a solid buffer.
Why we like the stock: The investment case rests on three pillars: consistent execution, improving return ratios, and attractive valuations. Return on assets (RoA) stands at 0.97 per cent for Q4FY26, tracking toward the management’s 1 per cent+ target. Return on equity (RoE) is guided to reach 14.5 per cent by FY2028. We maintain a ‘Buy’ rating with a fair value of ₹225.
With fewer negative surprises than peers, a capital adequacy ratio of 16.55 per cent, DCB Bank represents a compelling risk-reward proposition for patient investors.
Vedanta Ltd – Buy
CMP – ₹745
FV – ₹915
Resistance – ₹770/790
Support – ₹725/705
Vedanta Limited is a global leader across metals, oil & gas, critical minerals, power, and technology, with a diversified portfolio and strong presence across key natural resource segments. Vedanta is expected to deliver a strong Q4FY26 performance, with consolidated Earnings before interest, tax, depreciation and amortisation (Ebitda) likely to rise 27 per cent quarter-on-quarter (Q-o-Q) (+59 per cent Y-o-Y), driven by higher aluminum, zinc, and silver prices along with continued softness in alumina costs.
The aluminum business, contributing 50 per cent of overall earnings, should remain the key driver, supported by ongoing capacity ramp-up, better realizations, and integration benefits from captive coal and bauxite resources. Zinc and silver segments are also expected to sustain earnings momentum, reinforcing the company’s strong positioning in the base and precious metals upcycle.
Operationally, Vedanta remains well placed with expanded capacities in aluminum and alumina, alongside planned debottlenecking over FY2027–28E. The commissioning of the remaining captive mines is expected to structurally improve cost efficiencies and margins. With a large share of FY2027E Ebitda linked to aluminum, zinc, and silver, earnings visibility remains strong and well leveraged to favorable commodity cycles.
On the corporate front, the demerger remains a key catalyst for value unlocking. The restructuring is set to be effective from 1 May 2026 (record date same), with a 1:1 share allotment across four entities: Vedanta Aluminium Metal Ltd (Aluminium), Talwandi Sabo Power Ltd (Power), Malco Energy Limited (Oil & Gas), and Vedanta Iron and Steel Ltd (Iron & Steel), while Vedanta Limited will continue as the parent holding company.
This move is expected to improve transparency, enable focused capital allocation, and unlock value by allowing each business to be independently valued.
At the holding level, Vedanta Resources has made steady progress in deleveraging, supported by dividend flows and stake monetisation in Hindustan Zinc Limited, easing balance sheet concerns.
Based on our updated SoTP approach, valuation stands at ₹915 per share. With 5 per cent dividend yield, the risk-reward remains favourable. Maintain ‘Buy’, supported by strong earnings outlook and demerger-led value unlocking.
(Disclaimer: This article is by Shrikant Chouhan, head equity research, Kotak Securities. View expressed are his own.)
