RBL Bank - Q1FY22 Result Update - YES Securities

(Rating: BUY, TP: Rs230, Upside: 18%)

- Asset quality: Annualized slippage for 1QFY22 was elevated at 9.3%, with management citing similar slippage for 2QFY22 before normalization in 3QFY22

- Margin picture: NIM at 4.36% was up 19 bps QoQ, mainly due to decline in cost to deposits, with further deposit rate cuts in the offing

- Asset growth: Advances de-grew -3.6%/-0.3% QoQ/YoY with non-wholesale loans dragging on sequential basis even as wholesale loans saw sequential growth

- Opex control: Total opex jumped 19.3%/25.1% QoQ/YoY with management guiding for total opex remaining sticky at ~Rs 8.5bn for the next 1-2 quarters

- Fee income: Core fee income declined/rose -14.8%/135.1% QoQ/YoY due to sequentially weaker business activity in 1QFY22

- We upgrade RBL to 'Buy' from 'Add' with a revised price target of Rs 230: We value the bank at 0.95x FY23 P/BV for an FY22E/23E/24E RoE profile of 5.8/10.5/11.7%.

Shares of RBL Bank Limited was last trading in BSE at Rs. 186.75 as compared to the previous close of Rs. 194.45. The total number of shares traded during the day was 734489 in over 6455 trades.

The stock hit an intraday high of Rs. 193.65 and intraday low of 186.15. The net turnover during the day was Rs. 138483159.

Source : Equity Bulls

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