Motilal Oswal is bullish on RBL Bank has recommended buy rating on the stock with a target price of Rs 180 in its research report dated May 07, 2020.
Motilal Oswal 's research report on RBL Bank
RBK reported weak business trends, weighed by decline in wholesale assets and deposit outflows. Higher provisions impacted earnings, but slippages moderated on a sequential basis, enabling improvement in the coverage ratio. Asset quality is expected to remain under watch as 33% of the loan book availed moratorium, with management guiding for elevated credit costs in credit cards/MFI/MSME portfolio. We cut our PAT estimate for FY21/FY22 by 6%/5%, primarily as we factor in moderation in fee income, led by reduced economic activity / lockdown. Maintain Buy.
This may pose a risk as the business environment remains weak, thus prolonging the slippage trend in the Wholesale portfolio. We revise our TP to INR180 (0.9x FY22E ABV). Maintain Buy.
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