RBL bank delivered healthy set of numbers for Q3FY19, with PAT growth of 36%
yoy. On the operating front, the bank reported 40% yoy growth in NII. The NIM
qoq/yoy increased by 4/23 bps, respectively, driven by rise in advance yield. The
bank managed to reduce its expenses and brought down the cost/income ratio
from 54% in Q3FY18 to 51.6% in Q3FY19.

Outlook & Valuation: We expect RBL Bank to grow its advances at CAGR of 35%
over FY2018-20E. Improvement in CASA, higher share of retail book and inhouse
priority sector lending would support NIM going forward. At CMP, RBL
trades at 3x FY20E P/ABV, which we believe is attractive considering growth
prospects, hence, we recommend BUY with a target price of `690 over the next 12

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