Midcap Stock For Gains: 81-Year Old Bank Is Advised To Buy For Target Of Rs 290 In Month; Technical View

Investing in the stock market is all about short-term and long-term gains. Coming to short-term, some look to fetch returns on an intraday, weekly, monthly, half-yearly and yearly basis. In simple words, stocks that are held for 1 year or less period are short-term holdings. That being said, brokerage Religare has recommended BUY on one banking stock for short-term gains of as much as one 1-month. This stock is none other than RBL Bank, an 81-year-old lender which was earlier known as Ratnakar Bank.

RBL Bank is currently trading at Rs 267 apiece, marginally up on BSE with a market cap of over Rs 16,200 crore in the early trade of June 20. The banking stock is a midcap. The stock is closer to its 52-week high of Rs 300.50 apiece.

With a PE ratio of 13.79x and a RoE of 7.89%, RBL Bank has consolidated year-to-date with over 6% drop. Recovery in the stock has been witnessed on a month-on-month basis. In a month, the stock is up by 6.5%, while weekly gains are around 2.5%.

In a year, RBL shares jumped by 55%.

In its Midcap Medallion report, Religare said, "RBLBANK has been in a steady uptrend for over two years demonstrating a resilient structural development." It added, "In the process, the stock has neglected its lower top lower bottom formation by surpassing its previous
swing high."

Further, Religare's note highlighted that it has now registered a fresh breakout from a symmetric triangle pattern on the weekly charts. Thus, following the price action and buoyancy in the banking sector, Religare believe a bullish tone to continue in
the stock.

That being said, Religare has set a target of Rs 290 for 1 month period on RBL Bank with a stop loss of Rs 255. The buying range is between Rs 264 to Rs 268, which is currently the status of the stock.

Founded during the pre-Independence era, in 1943, RBL Bank is one of India's leading private sector banks with an expanding presence across the country. The Bank offers specialized services under five business verticals namely: Corporate Banking, Commercial Banking, Branch Banking & Retail Liabilities, Retail Assets and Treasury & Financial Markets Operations. It currently services over 15.57 million customers through a network of 545 branches; 1,272 business correspondent branches (of which 297 banking outlets) and 395 ATMs spread across 28 Indian states and Union Territories.

RBL Bank is listed on both NSE and BSE (RBLBANK).

In Q4FY24, RBL Bank reported a net profit of Rs 353 crore, which grew by 30% YoY and 51% QoQ. Retail Advances grew at a faster pace with growth of 30% YoY & 6% QoQ to Rs 49,147 crore; while total Deposits grew 22% YoY & 12% QoQ to Rs 103,494 crore. In the quarter, GNPA was down 72bps YoY & 46bps QoQ to 2.65%; NNPA was down 36 bps YoY & 6bps QoQ to 0.74%.

As of 31st March 2024, the Bank has 1817 total touchpoints of which 545 are bank branches
and 1,272 business correspondent branches. Of 1272 BC branches, 297 are banking outlets. RBL Finserve Limited ("RBL Finserve"), a 100% subsidiary of the Bank, accounts for 952 business correspondent branches. 28 new Bank branches and 106 new BC branches were added in FY24.