Q3FY2019 Result Update | Banking
Feb 07, 2019
RBL Bank
BUY
CMP
`585
Performance Highlights
Target Price
`690
Particulars (` cr)
Q 3FY19
Q 2FY19
% chg (qoq)
Q 3FY18
% chg (yoy)
Investment Period
12 Months
NII
655
593
10%
467
40%
Pre-prov. profit
498
449
11%
333
49%
Stock Info
PAT
225
205
10%
165
36%
Source: Company, Angel Research
Sector
Banking
RBL bank delivered healthy set of numbers for Q3FY19, with PAT growth of 36%
Market Cap (` cr)
24,828
yoy. On the operating front, the bank reported 40% yoy growth in NII. The NIM
Beta
1.3
qoq/yoy increased by 4/23 bps, respectively, driven by rise in advance yield. The
52 Week High / Low
652/439
bank managed to reduce its expenses and brought down the cost/income ratio
Avg. Daily Volume
68,579
from 54% in Q3FY18 to 51.6% in Q3FY19.
Face Value (`)
10
BSE Sensex
36,975
Robust advance growth; NIM Improved
Nifty
11,062
Reuters Code
RATB.NS
During Q3FY19, the bank’s advances grew by 35.2% yoy, of which retail loan
Bloomberg Code
RBK:IN
book increased 49% yoy to constitute 29% of the total advances. The corporate
loans inched up by 27% yoy. The net interest income during this period grew by
40% which is higher than advance growth. During the quarter NIM increased by
4bps QoQ and 23bps YoY to 4.12%, helped by rise in yield on advances (up 102
Shareholding Pattern (%)
BPS yoy) as against cost of funds (up 55 BPS yoy). Rise in yield was on account of
Promoters
7.8
increasing MCLR rates as well as increasing proportion of high-yielding non
MF / Banks / Indian Fls
20.7
wholesale book. Moreover, a slower rise in Opex aided lower cost/income by
248bps yoy to 51.6% in Q3FY19.
FII / NRIs / OCBs
39.8
Indian Public / Others
31.7
Total deposits surged by 35% yoy and 9.2% qoq in Q3FY19. CASA deposits
accounted for 24.6% of the total deposits.
On asset quality front, the bank continued to maintain strong asset quality with a
GNPA/NPA ratio of 1.38%/0.72% of loans. Total slippages for the quarter were at
Abs. (%)
3m
1yr
3yr
`211cr, which is 48% higher on qoq basis. Fresh slippages from agri loan book.
Sensex
4.9
8.5
52.2
Outlook & Valuation: We expect RBL Bank to grow its advances at CAGR of 35%
RBL Bank
7.9
21.7
80.3
over FY2018-20E. Improvement in CASA, higher share of retail book and in-
house priority sector lending would support NIM going forward. At CMP, RBL
trades at 3x FY20E P/ABV, which we believe is attractive considering growth
3-year price chart
prospects, hence, we recommend BUY with a target price of `690 over the next 12
700
months.
600
500
400
Key financials (Standalone)
300
Y/E March (` cr)
FY16
FY17
FY18
FY19E
FY20E
200
NII
819
1,221
1,766
2,463
3,347
100
% chg
42
42
27
33
34
Net profit
292
446
635
882
1,279
% chg
41.2
52.5
42.3
38.9
45.0
NIM (%)
2.6
2.9
3.4
3.6
3.7
Source: Company, Angel Research
EPS ( Rs)
7.0
10.6
15.1
21.0
30.5
P/E (x)
84
55
39
28
19
Jaikishan Parmar
P/ABV (x)
8.4
5.8
3.7
3.4
3.0
RoA (%)
0.9
1.0
1.1
1.2
1.4
Research Analyst
R oE (%)
11.2
12.2
11.5
12.5
16.0
022 - 39357600 Ext: 6810
Source: Company, Angel Research, Note: CMP as of 06/02/19
Please refer to important disclosures at the end of this report
1
RBL Bank | Q3FY2019 Result Update
Research Team Tel: 022 - 39357800
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Disclosure of Interest Statement
RBL Bank
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
Feb 07, 2019
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