Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

RBL Bank Limited - Q2FY21 Result Update - YES Securities

Posted On: 2020-10-29 05:47:05


Rising confidence around 1.2%+ RoA delivery in FY22; Upgrade to BUY with 12m PT of Rs230

Capping of potential losses in the high-risk businesses of Cards and MFIs, improvement in rating profile and less vulnerability of the corporate portfolio and impressive handle over cost leads us to upgrade earnings estimates (10-13% for FY21/22) and rating (from ADD to BUY) on the stock. With normalization of credit cost in key product lines, we expect RoA to bounce back sharply to 1.3%. The in-process capital raise will bolster CET-1 to 17.5%, thus strengthening the balance sheet and positioning the bank well to pursue growth in ensuing quarters. Overall, we believe that Q2 FY21 performance and commentary improves the visibility of 1%+ RoA delivery in FY22 and this should uplift valuation.

Cost control leads PPOP beat

- RBL Bank's core PPOP came in 10% higher than our estimate and core PPOP margin stood at 2.7%. The beat came despite the bank proactively reversing interest income on non-wholesale advances expected to slip by Q3 FY21. Thus, reported NIM at 4.34% was 50bps lower qoq.

- The decline in NIM weighed on NII growth (-10% qoq and 7% yoy). There was strong recovery in core fee income (up 52% qoq and stood at 93% of Q2 FY20 level) with revived traction in card fees and processing income. Treasury income was elevated, and stood similar to Q1 FY21 at Rs950mn.

- Notwithstanding higher business activity levels in non-wholesale products on sequential basis, the absolute opex came-off in Q2 FY21 and exhibited no growth on yoy basis. Cost/income remained below 50%.

- Advances stood at Rs562bn (-1% qoq and -4% yoy); non-wholesale grew 7% qoq and 23% yoy with its contribution rising to 57%. Cards (portfolio up 10% qoq), LAP (up 5% qoq) and Micro Banking (up 9% qoq) witnessed substantial portfolio expansion.

- CASA deposits were up 8% qoq and its share improved to 31% (26.5% in Q2 FY20).

- Provisioning at Rs5.25bn was in-line with expectations. Covid provisions were ramped up by Rs3.1bn to Rs6.64bn (now at 121 bps of advances). PCR was improved by 600 bps qoq to 59.5%.

- SC order pending slippages marginal at Rs858mn (15 bps of advances). Bank has created contingency provision against them.

- Overall capital adequacy at 16.50% with Common Equity Tier 1 ratio of 15.12% at the end of Q2FY21.

Shares of RBL Bank Ltd was last trading in BSE at Rs.174.7 as compared to the previous close of Rs. 175.65. The total number of shares traded during the day was 1556967 in over 15926 trades.

The stock hit an intraday high of Rs. 181.9 and intraday low of 171.2. The net turnover during the day was Rs. 274220141.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Auto Sector - Monthly Volume Round-up - Nov 20 - Reliance Securities

What do brokerages say on Burger King India Limited's IPO?

The Phoenix Mills - Potential fund infusion may usher in growth - ICICI Securities

Godrej Agrovet - Beneficiary of 60% increase in palm oil prices - ICICI Securities

Automobiles (wholesale) - Wholesale dispatches rise amidst modest retail trends - ICICI Securities

Oil & Gas - Sector Update - Dec 2020 - ICICI Direct

Phoenix Mills (Buy): Asset monetisation at favourable terms... - ICICI Direct

Aditya Makharia's views on November Auto Sales Number for November 2020 - HDFC Securities

Burger King India - IPO Review - ICICI Direct

Quant Pick - LIC Housing Finance - ICICI Direct

Tech Mahindra - Analyst Meet Update - ICICI Direct

Gladiator Stocks - Crompton Greaves Consumer Electricals - ICICI Direct

Derivatives Monthly Outlook - Nifty support at 12800 for ongoing momentum...

Quant Pick - Sun Pharmaceuticals - ICICI Direct

Monetary Policy - Expectation from YES Securities

Sector Update on Asset Management Companies - Subdued but improvement expected - HDFC Securities

Pre Monetary Policy View - Dec, 2020 - Lakshmi Iyer, President and CIO (Debt) & Head Products, Kotak Mutual Fund

Maintain REDUCE on Siemens - Smart recovery priced in - HDFC Securities

Banking Sector Credit Trends - Growth continues to moderate - HDFC Securities

Q2 FY21 GDP: Light at the end of the tunnel - YES Securities

Siemens - Q4 FY20 Result Update - YES Securities

Super action in Home Loans - SBIN, ICICIBC, AXSB, HDFC and LICHF gaining share - YES Securities

Polymer price tracker - Dec 1, 2020 - PVC prices continue to tread higher - ICICI Securities

Bajaj Finance - Company Update - Dec 2020 - ICICI Direct

Siemens Ltd - Healthy revival in orders and margins - ICICI Securities

Covid Recovery Pulse - Nov 30, 2020 - Festive positivity continues in auto retails, e-way bill generation improves...

Derivatives Weekly View (November 27): Momentum expected to continue in broader markets with Nifty support at 12800...

Derivatives Strategy - Positional Option - ICICI Direct

Preview on RBI Monetary Policy - December 2020 - Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

10 things you should know about Burger King India Limited

Views of HDFC Securities and Acuité Ratings & Research on Q2FY21 GDP Numbers

Rollover Report for November 2020 - December 2020: Angel Broking

Initiating Coverage on Godrej Properties - The housing factory - HDFC Securities

Burger King IPO - Angel Broking

Rollover Analysis - Record foreign inflows pushes Nifty to 13k - YES Securities

Ceramic tiles industry - Market share gains sustain for top branded players - ICICI Securities

Gas sector - CGD: Competition to hit margins, volumes and lead to derating - ICICI Securities

Cement - Prices resilient in Q3; consensus upgrades to continue - ICICI Securities

Specialty chemicals - Price trend in Sep-20 - ICICI Securities

Timken India - Q2FY21 Company Update - ICICI Direct

Upgrade in target price of IDFC First Bank - Angel Broking

Laurus Labs stake acquisition in Richore Lifesciences - Angel Broking

Shares of Lakshmi Vilas Bank (LVB) suspended from trading - Angel Broking

Initiating Coverage on Sundram Fasteners - Fastening growth - HDFC Securities

Astral Poly Technik - Scalability to further improve with storage tanks foray - ICICI Securities

Vardhman Special Steel - Q2FY21 Company Update - ICICI Direct

Initiating Coverage - Advanced Enzyme Technologies - ICICI Direct

L&T - Secures Large Contract - Nov 25, 2020 - Angel Broking

Alembic Pharmaceuticals - Tentative Approval for JV - Angel Broking

Drug launch by Lupin - Tacrolimus Capsules - Angel Broking



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019