April 18, 2024

Motilal Oswal’s analysis report on RBL Financial institution

RBL Financial institution (RBK) reported 3QFY24 PAT of INR2.33b (26% miss) because the financial institution made a contingent provision of INR1.15b with respect to AIF investments pursuant to the RBI round. Adjusted for this provision, PAT stood at INR3.19b (vs. our estimate of INR3.16b). NII grew 21% YoY to INR15.4b (in line; up 4.8% QoQ). NIMs moderated by 2bp QoQ to five.52% in 3QFY24.  Advances progress was wholesome at 20% YoY/4.7% QoQ, led by wholesome progress within the retail phase. Deposit progress stood at 13.5% YoY/3.3% QoQ. The CASA ratio moderated 195bp QoQ to 33.8%. Contemporary slippages elevated to INR6.7b. Gross NPA/NNPA ratios had been largely flat at 3.12%/0.80%, whereas PCR declined 56bp QoQ to 75.1%.

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We minimize our FY24/FY25 earnings estimates by 10%/9% and estimate FY25 RoA/RoE of 1.1%/10.3%. We reiterate our Impartial stance with a revised TP of INR270 (1.0x Sep’25E ABV).

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RBL Financial institution – 20012024 – moti