Add RBL Bank, target price Rs 126: ICICI Securities
RBL Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.
By ETMarkets.com | Updated:
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ICICI Securities has add call on RBL Bank with a target price of Rs 126. The current market price of RBL Bank Ltd. is Rs 114.1. Time period given by analyst is one year when RBL Bank Ltd. price can reach defined target.
RBL Bank Ltd., incorporated in the year 1943, is a banking company (having a market cap of Rs 6843.45 Crore).
RBL Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2713.65 Crore, down -.50 % from last quarter Total Income of Rs 2727.28 Crore and up .32 % from last year same quarter Total Income of Rs 2704.90 Crore. The bank reported net profit after tax of Rs 164.77 Crore in latest quarter.
Investment Rationale
RBL Bank (RBL) exited H2FY22 on the management-guided path: 1) Slippages moderated to 4.3% though it was elevated relative to peers. 2) This, coupled with aggressive write-offs and recoveries, supported 44bps decline in GNPAs. Improved delinquency bucket and recoveries from written-off accounts aided it to shore coverage by 750bps QoQ to 70.4%. Credit cost settled on expected lines at 2.7%. NIMs too benefited by 45bps due to interest recognition on the restructured pool. However, Q4FY22 PAT missed the 1% exit RoA guidance due to lower non- interest income and higher opex. Better NII growth was offset by higher operating costs (up 37% YoY) and elevated ‘cost to income’ at 60%. MD & CEO appointment is in the final leg and the candidature list has been sent to the regulator for approval. Key to watch out will be strategic changes and execution post the management change. Now trading at 0.4x FY24E book, risk- reward appears favourable.
Promoters held 0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 30.59 per cent, DIIs 19.05 per cent.
RBL Bank Ltd., incorporated in the year 1943, is a banking company (having a market cap of Rs 6843.45 Crore).
RBL Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2713.65 Crore, down -.50 % from last quarter Total Income of Rs 2727.28 Crore and up .32 % from last year same quarter Total Income of Rs 2704.90 Crore. The bank reported net profit after tax of Rs 164.77 Crore in latest quarter.
Investment Rationale
RBL Bank (RBL) exited H2FY22 on the management-guided path: 1) Slippages moderated to 4.3% though it was elevated relative to peers. 2) This, coupled with aggressive write-offs and recoveries, supported 44bps decline in GNPAs. Improved delinquency bucket and recoveries from written-off accounts aided it to shore coverage by 750bps QoQ to 70.4%. Credit cost settled on expected lines at 2.7%. NIMs too benefited by 45bps due to interest recognition on the restructured pool. However, Q4FY22 PAT missed the 1% exit RoA guidance due to lower non- interest income and higher opex. Better NII growth was offset by higher operating costs (up 37% YoY) and elevated ‘cost to income’ at 60%. MD & CEO appointment is in the final leg and the candidature list has been sent to the regulator for approval. Key to watch out will be strategic changes and execution post the management change. Now trading at 0.4x FY24E book, risk- reward appears favourable.
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Promoter/FII Holdings Promoters held 0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 30.59 per cent, DIIs 19.05 per cent.
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