Mehabe score: 3 G Factor: 3 Piotski Score: 3 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 3.
Description
RBL Bank is a banking company engaged in providing a wide range of banking and financial services including wholesale banking, retail banking, treasury operations and other banking related activities.#
Main Points
Ratios (Q3FY21)
Capital Adequacy Ratio – 17.9%#
Net Interest Margin – 4.19%
Gross NPA – 1.84%
Net NPA – 0.71%
CASA Ratio – 31.1%Site:RBLBANKMain Symbol:RBLBANK
Stock trades at 195.0, below its 50dma 208.18 and below its 200dma 214.4. The stock remains bearish on technicals
The 52 week high is at 274.30 and the 52week low is at 156.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.10 times its book value
Weakness
– has low interest coverage ratio.
– has a low return on equity of 7.03% for last 3 years.
-Contingent liabilities of Rs.76041.17 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.2057.84 Cr.
-Dividend payout has been low at 9.46% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 19.4x. Kotak Mah. Bank trades at the industry’s max P/E of 33.2x. RBLBANK trades at a P/E of 22.9x
– Industry’s mean G-Factor is 3.5 while the mean Piotski score is 6.0. RBLBANK has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is -2.8%. The max 1- month return was given by ICICI Bank: a return of 6.43 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1922.0 cr compared to Rs 2208.0 cr for period ended Mar 2020, a fall of 13.0%
Operating Profits reported at Rs 1484.0 cr for period ended Mar 2021 vis-vis 1371.0 for period ended Mar 2020 .
Operating Margins expanded 1511.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.26 compared to Rs 2.46 for previous quarter ended Dec 2020 and Rs 2.25 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8215.0 cr for period ended Mar 2021 vis-vis sales of Rs 8514.0 cr for the period ended Mar 2020, a fall of 3.6%. The 3 year sales cagr stood at 22.1%.
Operating margins shrank to -1369.0% for period ended Mar 2021 vis-vis -1019.0% for period ended Mar 2020, contraction of 35000.0 bps.
Net Profit reported at Rs 508.0 cr for period ended Mar 2021 vis-vis sales of Rs 506.0 cr for the period ended Mar 2020, rising 0.4%.
Company reported a poor Net Profit CAGR of -7.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 7597.0 cr for period ended Mar 2021 vis-vis Rs -5084.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 7.0% over the last 3 Years. – The stock has given a return of 15% on a 1 Year basis vis-vis a return of -30% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of 22% over the last 3 Years. – The compounded profit growth on a TTM basis is 0% vis-vis a compounded profit growth of -7% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 34.61% vis-vis 34.25% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 44.3% vis-vis 42.64% for Mar 2021
Conclusion
– Stock is trading at 1.10 times its book value – has low interest coverage ratio.
– has a low return on equity of 7.03% for last 3 years.
-Contingent liabilities of Rs.76041.17 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.2057.84 Cr.
-Dividend payout has been low at 9.46% of profits over last 3 years
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 208.18 and is trading at 195.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
