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Buy RBL Bank; target of Rs 582: HDFC Securities

HDFC Securities is bullish on RBL Bank has recommended buy rating on the stock with a target price of Rs 582 in its research report dated April 28, 2018.

May 03, 2018 / 03:31 PM IST
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HDFC Securities' research report on RBL Bank

RBL  Bank  (RBK)  delivered  across parameters, again. Best-in-class growth (+37% YoY) and robust fees (+33%) drove net earnings (~Rs 1.8bn, +37% YoY). NIM  jumped  for  the  8th  successive  quarter, just shy of 4% (up 46/9bps YoY/QoQ) with the retail thrust. Asset  quality  healed, barring agri loans. RBK beefed up coverage (~57.6%, up  ~400bps  QoQ)  even  as  net  stress dropped 29bps to 0.86%. Solid CASA accretion  (+41%  YoY)  continued,  with  differential  SA  rates. Customer acquisition was robust (4.5mn total).


As high-yielding retail loans rise  and the lucrative BBB vertical expands, an uptick in profitability is inevitable. We have factored in a 6bps jump in RoAA over FY18-20E. Maintain BUY with a TP of Rs 582 (3x Mar-20E ABV of Rs 194).

For all recommendations report, click here

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first published: May 3, 2018 03:31 pm

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