Buzzing private banking stock below Rs 150

The stock has jumped over 30% from its September 28 low of Rs 108.30.

RBL Bank is one of India’s leading private-sector banks with an expanding presence across the country. The private sector bank is engaged in providing a wide range of banking and financial services including wholesale banking, retail banking, treasury operations and other banking-related activities.

The stock has jumped over 30% from its September 28 low of Rs 108.30 and now, with a splendid rally of nearly 2% on Friday, the stock has marked a fresh six months high. It witnessed a robust volume activity on Friday as the total traded volume so far has been 5.2 crore, which is the highest single-day volume since September 26, 2022.

From a technical standpoint, the stock is trading above its important short-and medium-term moving average. Interestingly, the 20 and 50DMA are in the desired sequence and both the moving averages are trending higher.

The trend strength indicator, Average Directional Index (ADX) is at 27.98, which shows strength. The +DI is much above the -DI and ADX. This structure is indicating the bullish strength in the stock. The daily MACD is in an uptrend and is seen rebounding taking support at its nine periods average thus validating positive bias in the stock.

For the quarter that ended September 30, 2022, the asset quality of the bank stood as such wherein the GNPA was lower on a QoQ basis at 3.80% with a net NPA of 1.26% and a provision coverage ratio of 67.8%. Bank had a total slippage of Rs 812 crore for the quarter and total overall recoveries and upgrades were Rs 314 crore as a result, the net slippages were at Rs 498 crore.

Of the slippages, Rs 279 crore pertain to the slippages from the restructuring book, where the bank has already substantially taken the provisions in the past. So, the need for additional provisioning was reduced. In credit cards, the bank's slippages were Rs 245 crore this quarter, marginally higher than the previous quarter. Bank recoveries and upgrades continue to be strong in this segment. So, the net slippages are Rs 194 crore.

Briefly, on advances, the bank's growth journey has resumed with an overall advance growth of 4% QoQ and 12% YoY. Bank’s disbursals in retail were approximately Rs 2,800 crore this quarter and the bank expects their disbursal run rate to continue to grow in the coming quarters.

As a result, this quarter, retail advances grew 6% YoY and 7% sequentially. The wholesale advances grew 20% YoY and 2% sequentially. Retail to wholesale advanced mix stood at 52 and 48 respectively. Within retail, cards grew by 17% YoY, microfinance by 8% lower YoY, but showed strong growth of 22% sequentially.