Buy RBL Bank; target of Rs 378: AUM Capital

AUM Capital's research report on RBL Bank

RBL Bank (RBL), formerly known as Ratnakar Bank Ltd is a Scheduled Commercial Bank (SCB). It is one of India’s fastest growing Private Sector Banks. It offers a comprehensive range of banking products and services customized to cater to the needs of large corporates, small and medium enterprises (“SMEs”), agricultural customers, retail customers and development banking & financial inclusion (low income) customers. It has been expanding its presence across India through a growing network of branches and ATMs and upgrading its traditional delivery channels with modern technology-enabled channels. As of March 31, 2016, it had 197 interconnected branches and 362 interconnected ATMs spread across 16 Indian states and union territories serving approximately 1.9 million customers.

At the CMP of Rs. 307.55, the stock is trading at FY16 P/BV of 3.34x. The current valuation of 2.44x FY18E Book Value looks attractive. We recommend a BUY on the stock with a Price Target of Rs. 378 (3x FY18E BV) with an upside potential of 23% from the current level with an investment horizon of 09-12 months.