EUR 120.00 For Business Accounts Only

MOSL: Morning India (29/January/19): 1. RBL Bank; 2. Piramal Enterprises; 3. Shriram Transport Fin.; 4. Tata Power; 5. Canara Bank; 6. Bank of India; 7. Shriram City Union Fin.; 8. Escorts

MOrning India (29/January/19): 1. RBL Bank; 2. Piramal Enterprises; 3. Shriram Transport Fin.; 4. Tata Power; 5. Canara Bank; 6. Bank of India; 7. Shriram City Union Fin.; 8. Escorts

 

Today’s top research idea

RBL Bank: In-line performance; margins continue to improve

• PAT increased 36% YoY to INR2.25b in 3QFY19. NII grew 40% YoY to INR6.5b, led by 35% YoY advances growth and 4bp QoQ expansion in margins to 4.12%. Core fees grew 50% YoY (100% YoY growth in card fees). Loan book grew 35% YoY, led by strong growth in retail book (+51% YoY; ~43% of total book).
• RWA/total assets declined to ~78%, as loans were rated externally, resulting in a stable tier 1 ratio of 12.5%. With a diverse product portfolio, rising share of high-yielding loans and capable management, RBL is estimated to report industry leading loan CAGR of 35% over FY18-21.
• We expect stable/improving margins, led by an improving asset mix and continued asset re-pricing. We, thus, estimate RoA/RoE of 1.3/17.6% by FY21. Maintain Buy with a revised TP of INR650 (3.2x Sep’20E ABV).

Piping hot news

Leg-up for PSU banks: Modi government may infuse Rs 54,000 crore in February

• The government has indicated to state-run banks that it will finalise the infusion of over `54,000 crore into public sector banks (PSBs) once their results for the December quarter are out in February, banking sources said. The move is part of the government’s proposed `1.06-lakh-crore infusion into capital starved PSBs in FY19, against `88,139 crore a year before. It already provided `51,533 crore to a clutch of state-run banks by end-December.