RBL Bank Shares Hit 52-Week High on Strong Q3 Numbers; Should you Buy, Sell or Hold?

RBL Bank Share Price: RBL Bank shares have hit a fresh 52-week high in early morning deals today after the private sector lender said after the bank reported a 14% rise in gross advances to Rs 68,371 crore in the December quarter against Rs 59,967 crore in the corresponding quarter a year ago. Similarly, the gross advances rose 6 percent from Rs 64,608 crore logged in the September 2022 quarter. RBL Bank stock gained 3.08% to Rs 185.50 against the previous close of Rs 179.95 on BSE. The stock hit a 52-week low of Rs 74.15 on June 20, 2022 and a 52-week high of Rs 187.60 on January 3, 2023.

In a year, the stock has gained 37.87 per cent and risen 2% per cent since the beginning of this year. Total 9.28 lakh shares changed hands amounting to turnover of Rs 17.01 crore. Market cap of the lender rose to Rs 11,019 crore on BSE.

Retail advances of the private lender rose 12% YoY and 7% sequentially while wholesale advances grew 17% YoY and 5% sequentially for the December 2022 quarter . The mix of retail: wholesale advances was approximately 52:48.

“The bank continues to focus on growing the share of granular retail deposits in the overall deposit mix, with retail deposits (as per liquidity coverage ratio (LCR) definition) at approximately 42.5% as against 41.3% as at the end of the last quarter and 37.9% as of December 31, 2021,” said the bank in its quarterly update.

The lender reported a stellar set of earnings in the September quarter. It clocked a 554 per cent year-on-year rise in standalone net profit to Rs 201.55 crore in Q2FY23 as a sharp decline in provisioning for bad loans from a year ago and healthy increase in net interest income boosted the lender’s bottomline.

According to stock market experts, RBL Bank has reported strong Q3 business update ahead of the Q3FY23 results and the update is a signal that the private bank is coming out of its bad loan problems and now it is moving towards profitability.

Domestic brokerage Motilal Oswal said, “: In 3QFY23, RBK witnessed a strong traction in loan growth, led by healthy trends in both retail and wholesale segments. Traction in deposit remains healthy; however, deposit franchise is improving steadily, led by focus on growing the retail deposits and increasing the CASA ratio sequentially.” Motilal Oswal gave the leander a ‘Buy’ rating at CMP Rs 186.

Speaking on the reason for rise in RBL Bank in early morning deals, Sandeep Pandey, Business Partner at Emkay Global Financial Services said, “RBL Bank has reported promising Q3 business update and market is buzz with strong quarterly numbers from the private lender. The bank has reported strong business update after facing bad loan problem for long. So, the business update might turn out as a signal from the RBL Bank about moving towards profitability leaving the bad loan problem behind. This is the major reason for RBL Bank stocks hitting new 52-week high in recent trades.”

Advising ‘buy and hold’ strategy in regard to RBL Bank shares, Sumeet Bagadia, Executive Director at Choice Broking said, “Stock is in continuous uptrend and it may continue for few more sessions. It has strong support at Rs 178 apiece levels and one can buy the scrip at current levels maintaining strict stop loss at Rs 178 apiece levels for short term target of Rs 200 levels.” Sumeet Bagadia of Choice Broking further added that those who have RBL Bank shares in their stock portfolio, they can upgrade their trailing stop loss at Rs 178 and hold for Rs 200 per share target.

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