RBL Bank shares up 5%? Anand Rathi sees the stock at Rs 204 in 1-3 months

Shares of RBL Bank Ltd climbed 5 per cent in Monday's trade amid a broad-based rally in the banking pack. The stock rose 4.86 per cent to hit a high of Rs 176.40. The stock had been consolidating within a price range of Rs 170–150, displaying limited price momentum, Anand Rathi Share and Stock Brokers said in a note.

"In today’s trading session, the stock has broken out above this range, supported by robust trading volumes that indicate potential bullish momentum. The daily RSI has confirmed this breakout, rising above 60 and reflecting growing trend strength," the brokerage said.

It advised traders consider accumulating the RBL Bank stock within the price range of Rs 173–167, while keeping a stop loss at Rs 155 to manage risk, for an upside of Rs 204 in the next 1-3 months.

The brokerage noted that the December quarter net profit fell sharply to Rs 3.26 crore from Rs 230 crore YoY, driven by higher provisions, indicating potential earnings challenges. Asset quality was mixed, with gross non performing asset (NPA) rising to 2.92 per cent from 2.88 per cent YoY, but net NPA improving to 0.53 per cent from 0.79 per cent, reflecting some control over bad loans but ongoing risks in segments like credit cards and microfinance.

It noted that loan growth expectations were revised to low double digits, though historical advances growth was robust at 19.66 per cent YoY, outperforming its 5-year CAGR of 7.68 per cent.

Arihant Stock Broking said expects the bank's profitability to improve, driven by improvement in cost to asset ratio. Its slippages in JLG book has peaked out, the brokerage said adding that Q4FY25 is expected to see an improvement.

"Further, overall slippages are also expected to improve. Collection efficiency had shown an uptick. We expect it to remain strong going forward. NIMs are likely to remain within the range of 4.7 to 4.9 per cent, due to lower disbursement in JLG segment. States like Maharashtra, Punjab, Bihar, Rajasthan has seen decent improvement in terms of collection efficiency," it said.

The brokerage noted that the bank has no unhedged derivative exposure. "We believe the company has limited downside at current levels with 0.6 PBV. Can add in tranches." it said on March 11.