RBL Bank Ltd. share price target

RBL Bank (RBL) has reported healthy Q2FY24 earnings with PAT at INR 2.94bn (1.0% RoA), driven by strong growth and operating leverage, while net NPAs reduced sharply to 78bps. The bank has utilised the one-off tax provisions reversals (INR 2.98bn) towards contingent buffer and improving PCR. Better-than-expected ramp-up in newer business and improved execution drive our more constructive stance on its vision FY26.

Expect pickup in retail loans and newer products to aid a 19% credit CAGR over FY23-FY25, with deposit CAGR of 15%

RBL Bank (RBL) reported a mixed Q1FY24 with strong loan growth, contained opex and steady 1% RoA though deposit growth was flattish and NIM declined QoQ. Asset quality was broadly stable with overall reduction in gross slippages though credit card slippages inched up.

We met RBL Bank’s (RBL) MD&CEO Subramania Kumar, and ED Rajeev Ahuja, for light on the bank’s newly unveiled FY23-FY26 strategy. Under the new MD&CEO, RBL has filled almost every senior management role (hired 6 talents laterally and elevated 21 internally) in the past ~12 months.

RBL Bank (RBL) reported a healthy Q4FY23 with PAT at Rs2.7bn (RoA: 1%, as guided) driven by NIM uptick, healthy growth in deposits / loans (4-5% QoQ) and stable headline asset quality, though marginal QoQ rise in cost-income / slippages and drop in LCR were a tad disappointing.

Sequential advance growth momentum of 6% outpacing peers after a long hiatus. Moreso, it was broad-based across the retail product segment and wholesale advances too witnessed similar traction; ii) NIMs expanded 19bps QoQ to 4.74% primarily due to repricing benefit in the wholesale book and deployment of excess liquidity.

Turnaround on the anvil