RBL Bank: 29% PAT growth & 19% total income growth in Q1-25 at a PE of 11
Guiding for 32-37% PAT CAGR for FY24-26 on the back of 20% CAGR in advances and deposits. Available at an attractive price to book of 0.98.
1. Private Bank
rblbank.com | NSE: RBLBANK
2. FY20-24: PAT CAGR of 23%
3. Strong FY-24: PAT up 32% & Total Income up 21%
4. Strong Q1-25: PAT up 29% & Total Income up 19% YoY
PAT up 5% & Total Income up 1% QoQ
5. Improving return ratios
6. Outlook: Growth of 20%+ for FY24-26
i. FY24-26: PAT CAGR of 32-37%
ROE of 14-15% in FY26 based on current equity base of Rs 14,646 cr implies a PAT of Rs 2050-2200 cr in FY26 a PAT CAGR of 32-37% for FY24-26
7. PAT growth of 29% & Total income growth of 19% for Q1-25 at a PE of 11
8. So Wait and Watch
If I hold the stock then one may continue holding on to RBLBANK
RBLBANK has achieved a strong FY24 and followed it up with a strong Q1-25 in line with the guidance for FY25.
RBLBANK has a strong outlook with the management guiding for 20%+ growth in advances & deposits for FY24-26 with 35-40% PAT CAGR
9. Or, join the ride
If I am looking to enter RBLBANK then
RBLBANK has delivered a strong Q1-25 with PAT growth of 29% & total income growth of 19% at PE of 11 which makes the valuations attractive rich in the short term.
RBLBANK is guiding for PAT CAGR of 32-37% for FY24-26 at PE of 11 which makes the valuations quite attractive over the longer term.
RBLBANK had a book value per share of Rs 241.58 as of Q1-25 end on a current price of Rs 237.45. It is quoting at a price to book of 0.98 which makes it quite attractive.
The longer term guidance for FY24-26 and the Q1-25 performance against it provides confidence for entry into the bank at attractive valuations of price to book of less than 1. Potential of price to book getting re-rated to 1.5 would provide opportunity in RBLBANK
One needs to keep a watch on asset quality of RBLBANK as Gross NPA and Net NPA have increased even though provisioning coverage ratio is 90%
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