Business News/ Markets / Stock Markets/  RBL share price hits 52-week high after strong Q3 business update. Buy or sell?

Stock market today: RBL Bank shares have hit fresh 52-week high in early morning deals on Friday. The private lender had reported promising quarterly business update on Wednesday where it reported 12 per cent YoY growth in retail advances and 17 per cent YoY growth of whole sale advances. Despite weak opening in morning deals, RBL share price attracted buying interest of stock market bulls and went on to hit intraday high of 189.30 on NSE.

According to stock market experts, RBL Bank has reported strong Q3 business update ahead of the Q3FY23 results and the update is a signal that the private bank is coming out of its bad loan problems and now it is moving towards profitability. This is the short term buzz that has attracted buying interest in RBL Bank shares despite weak sentiments on Dalal Street. They said that RBL Bank shares are currently having strong support at 178 and in short term it may go up to 200 apiece levels.

Speaking on the reason for rise in RBL Bank in early morning deals, Sandeep Pandey, Business Partner at Emkay Global Financial Services said, "RBL Bank has reported promising Q3 business update and market is buzz with strong quarterly numbers from the private lender. The bank has reported strong business update after facing bad loan problem for long. So, the business update might turn out as a signal from the RBL Bank about moving towards profitability leaving the bad loan problem behind. This is the major reason for RBL Bank stocks hitting new 52-week high in recent trades."

Ex Deputy Vice President of HDFC Bank went on to add that current government's idea of handling bad loans is going to have a big impact on Indian banking system. Now, the system is providing a window of opportunity to those lenders who are under the stress of bad loans. Now, the bad loan won't force any bank to continue provisioning for long and remind under its stress. This system has helped RBL Bank to come out of bad loan stress in lesser time and we might see the private lender among the profit making banks in upcoming quarters.

RBL Bank share price target

Advising 'buy and hold' strategy in regard to RBL Bank shares, Sumeet Bagadia, Executive Director at Choice Broking said, "Stock is in continuous uptrend and it may continue for few more sessions. It has strong support at 178 apiece levels and one can buy the scrip at current levels maintaining strict stop loss at 178 apiece levels for short term target of 200 levels." Sumeet Bagadia of Choice Broking further added that those who have RBL Bank shares in their stock portfolio, they can upgrade their trailing stop loss at 178 and hold for 200 per share target.

RBL Bank Q3FY23 business update

On Wednesday, RBL Bank reported its Q3 business update ahead of its Q3FY23 results. In this business update, private lender's retail advances grew 12 per cent YoY and 7 per cent sequentially while wholesale advances grew 17 per cent YoY and 5 per cent sequentially for the quarter ended December 31, 2022. The mix of retail: wholesale advances was around 52:48.

"The Bank continues to focus on growing the share of granular retail deposits in the overall deposit mix, with retail deposits (as per LCR definition) at approx. 42.5% as against 41.3% as at the end of the last quarter and 37.9% as of December 31, 2021," RBL Bank said in its exchange communication while sharing its Q3 business update for current fiscal.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Updated: 06 Jan 2023, 12:20 PM IST
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