Buy RBL Bank, target Rs 780: ICICI Securities
ICICI Securities has buy call on RBL Bank Ltd. with a target price of Rs 780. The current market price of RBL Bank Ltd. is Rs 564.75. Time period given by the brokerage is a year when RBL Bank Ltd. price can reach defined target. RBL Bank Ltd., incorporated in 1943, is a banking company with a market cap of Rs 23297.69 crore.
Investment rationale by ICICI Securities
Investing in a high-growth stock like RBL Bank (RBL) at a time when system loan growth is near historic lows may appear to be a contradiction, but it is allayed by:1) RBL’s relatively small market share of less than 0.5%, 2) the large opportunity presented by the space being vacated by several PSU banks, and 3) the considerable opportunity for RBL to improve its RoA to similar levels as peers.
We do not see too many similar instances of small, well-run, high-growth private banks with reasonable assurance of improving RoA. Hence, we initiate coverage on RBL with a BUY rating and a target price of Rs780, implying a robust upside of 45%.
Investment rationale by ICICI Securities
Investing in a high-growth stock like RBL Bank (RBL) at a time when system loan growth is near historic lows may appear to be a contradiction, but it is allayed by:1) RBL’s relatively small market share of less than 0.5%, 2) the large opportunity presented by the space being vacated by several PSU banks, and 3) the considerable opportunity for RBL to improve its RoA to similar levels as peers.
We do not see too many similar instances of small, well-run, high-growth private banks with reasonable assurance of improving RoA. Hence, we initiate coverage on RBL with a BUY rating and a target price of Rs780, implying a robust upside of 45%.
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