RBL Bank share price gained over 2 percent intraday on January 5 after foreign broking house CLSA initiated coverage on the bank with a buy rating and kept a target price at Rs 330. This implies a 38 percent upside from current levels.
CLSA expect RBL to deliver 13 percent ROE by FY23CL as credit costs normalise post-COVID, with the ability to leverage up further (15 percent Tier-1 in FY23CL).
While the bank’s Casa saw a 40 percent CAGR over FY15-20, the high growth has led to a relatively low Casa ratio. The asset side consolidation provides RBL with the much-needed opportunity to build its retail deposit franchise, and lowering its cost of funds will be key to sustained rerating, it said.
At 11:42 hrs, RBL Bank was quoting at Rs 244.55, up Rs 4.95, or 2.07 percent on the BSE.
The share touched its 52-week high Rs 365.00 and 52-week low Rs 101.60 on 14 January 2020 and 22 April 2020, respectively.
Currently, it is trading 33 percent below its 52-week high and 140.7 percent above its 52-week low.