Motilal Oswal's research report on RBL Bank
RBK reported a beat in earnings, driven by controlled opex, while revenue growth remained in line with estimates. Loan growth stood at 21% YoY, while margins moderated 17bp QoQ to 4.8%. Fresh slippages moderated to INR5.5b (3.7% annualized), resulting in a 15bp/10bp QoQ improvement in GNPA/NNPA ratio to 3.2%/1.0%. PCR improved 157 bp QoQ to 69.6%. We increase our earnings estimates for FY24/25 by 7%/6% to factor in lower opex this quarter.
Outlook
We thus estimate RBK to deliver FY25 RoA/RoE of 1.1%/10.3%. We retain our Neutral rating with a TP of INR210 (0.8x FY’25E ABV).
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