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Last Updated : Oct 24, 2018 06:23 PM IST | Source: Moneycontrol.com

Buy RBL Bank; target of Rs 618: HDFC Securities

HDFC Securities is bullish on RBL Bank has recommended buy rating on the stock with a target price of Rs 618 in its research report dated October 23, 2018.

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HDFC Securities' research report on RBL Bank


RBK’s 2Q was impressive with industry leading broad based growth (37%), strong fee traction (+61%), 7th consecutive qtr of sequential NIM (4.08%) improvement and stable asset quality (net stressed book at a mere 80bps). The sustained NIM uptick was on account of MCLR reset and increase in the share of the high yielding retail portfolio. The steep rise in other opex (11% QoQ) was due to the cards business and restricted oplev improvement (Core C-I at 51.9%, -110bps). PCR further improved to 61.5%, (+110bps QoQ) despite flat provisions.


Outlook


Despite this, we expect RBK to report an RoAA of 1.34% (up from 1.15% in FY18). In spite of the inevitable fund raise in FY20 we have not incorporated it into our assumptions. Maintain BUY with TP of 618 (3xSept-20E ABV of Rs 206).


For all recommendations report, click here


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First Published on Oct 24, 2018 06:23 pm
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