Reduce RBL Bank; target of Rs 200: ICICI Securities

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ICICI Securities research report on RBL Bank

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. Opex growth is likely to increase, which could create pressure on cost-toincome ratio in coming quarters. We estimate RoAs at ~0.9% each for FY24E/FY25E with single-digit RoE.

Outlook

We raise our target price to INR 200 (vs INR 170 earlier) valuing the bank at ~0.8x FY25E ABV (vs 0.7x earlier). Post a sharp 28% rise in the stock price in last ~1 month, we downgrade it to REDUCE (from Hold earlier).

For all recommendations report, click here

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RBL Bank - 24 -07 - 2023 - isc