Strong management team & focused approach to drive growth: The new Management led by MD & CEO Mr Vishwavir Ahuja which took charge in 2010 has been instrumental in the outstanding growth of the bank over the years, wherein the bank transformed itself from being a traditional bank to a new age bank. RBL has been largely focusing on funding working capital to large and midsized corporates. It has recently ventured into retail lending by buying out the credit card business of Royal Bank of Scotland (RBS) and has been expanding its retail business by introducing other new retail-centric products.

Outlook and Valuation: Currently the stock is valued at 2.3x its FY2018E BV of `130; this we feel is quite attractive given the growth prospects of the bank. Changing business mix & stable credit cost are expected to lead to a predictable earnings growth. While the ROE improvement could be gradual, we believe absolute growth in earnings could accelerate going ahead. RBL in our view has all the ingredients to become a multi-year growth story with a stable asset quality. Keeping this in mind, feel the stock should be valued at 2.5x its FY2018E BV. They recommend ACCUMULATE on the stock with a target price of `325.