HDFC Securities' research report on RBL Bank
RBL Bank (RBK) reported its highest-ever quarterly PAT led by healthy loan growth (+17% YoY) and stronger margins (5%), partly offset by elevated opex. Loan growth witnessed strong traction in retail credit (~54% of loans), led by credit cards/MFI and new segments (such as home loans, and tractors). Management continues to focus on the mobilisation of granular deposits reflecting in sequential improvement in CASA (+6% QoQ), but we watch out for sustained execution, given the tight liquidity environment and aggressive pricing. Management has guided for an aspirational business growth (+20% CAGR over FY23-26E), which we argue is a tall ask.
Outlook
Given RBK is in an investment phase, opex (branches, people, new businesses) and lagged deposit repricing are likely to keep return ratios muted; maintain REDUCE with revised TP of INR135 (0.6x Mar-25 ABVPS).
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