scorecardresearchIDFC Bank and RBL Bank: These two banking stocks have risen by more than 30% in one month

IDFC Bank and RBL Bank: These two banking stocks have risen by more than 30% in one month

Updated: 25 Aug 2022, 12:23 PM IST
TL;DR.
In the last month, two private sector lenders, IDFC First Bank, and RBL Bank have increased by 35.18% and 32.05%, respectively. Shares of IDFC first bank rose 5.51% on average in the last two trading sessions.
Shares of RBL Bank ended at  <span class='webrupee'>₹</span>121.75 on the BSE in Wednesday's trade, up 16.95 percent from the previous close.

Shares of RBL Bank ended at 121.75 on the BSE in Wednesday's trade, up 16.95 percent from the previous close.

Shares of IDFC First bank have risen 5.51% on average in the last two trading sessions. The stock price has increased by 35.18 percent in the last month, from 35.95 to 48.60. This was after the bank reported its highest-ever net profit of 474 crore for the quarter ended June 2022.

In Wednesday's trade, the stock price opened on a positive note and touched a high of 48.85 per share on the BSE. It closed nearly 5.53% higher, at Rs. 48.60. During Wednesday's intraday, the stock recorded a volume of 40.0 million both on the NSE and BSE.

Since the release of its first-quarter results on July 30, the stock has risen from 37.55 to the current level of 48.60, representing a return of more than 29.42 percent.

From December 2021 to June 2022, the stock lost almost 44% of its value. However, in June, the stock began to rise and has since returned 66.72 percent.

Over the last three years, the stock gave a bare 11.72% return as compared to the Nifty Midcap 100, which gave a return of 97.86%.

The stock touched a 52-week-high of 53.5 on October 27th, 2021 and a 52-week-low of 29 on June 22nd, 2022, indicating that at the current level the stock is trading 70.98 higher than its 52-week low and it is just 8.01% away from its 52-week-high.

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Stock Price chart of IDFC First Bank 

For the June-ending quarter, IDFC Bank posted a net profit of 474.3 crore. The private-sector lender had posted a net loss of 630 crore in the year-ago quarter.

The net profit increased by 38.2 percent sequentially from 342.7 crore in the March 2022 quarter. Total income during April-June 2022-23 rose to 5,777.4 crore from 4,938.1 crore in the same quarter of the previous fiscal year.

The core interest income for the June quarter stood at 4,921.68 crore, up from 4,089.29 crore the previous year. Other income increased by 1.6 percent to 855.67 crore from 842.47 crore.

Asset quality improved with GNPA/NNPA at 3.36%/1.30% compared to 3.70%/1.53% during the previous quarter. The Provision Coverage Ratio (PCR) improved to 72.2%.

IDFC First Bank was founded by the merger of erstwhile IDFC Bank and erstwhile Capital First on December 18, 2018. At present, the bank’s total number of branches stands at 651, with total funded assets of Rs. 1,37,663 crore, according to research reports.

RBL Bank

Similarly, shares of the private sector lender, RBL Bank, have rallied 32.05% in the last month, which is 25 percent higher than the Bank Nifty, which returned 7.05 percent in the same period.

The stock has gained the majority of its value in the last two days, following the board's approval of a 3,000 crore capital raise.

Shares of RBL Bank ended at 121.75 on the BSE in Wednesday's trade, up 16.95 percent from the previous close. During Wednesday's intraday, RBL bank recorded a volume of 107.73 million, a 2.66 times surge over its average weekly volume of 38.2 million.

 

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Stock price chart of RBL bank 

The board has also cleared the issue of 1.75 crore additional equity stock options exercisable into an equivalent number of equity shares fully paid up of 10 each, in addition to residual/remaining options which remain ungranted under ESOP 2018, according to media reports.

On Monday, the company said it had appointed Gopal Jain, managing partner at Gaja Capital, and technology researcher Sivakumar Gopalan to its board.

For the June quarter, the bank reported a better-than-expected net profit of 201.2 crore, as against a net loss of 459.5 crore in the year-ago quarter.

The company's net profit has been increasing in recent quarters. It reported a net profit of 30.8 crore in the September 2021 quarter and 156.1 crore in the December 2021 quarter.

In the January-March period, the net interest margin, a key measure of profitability for lenders, hit an all-time high of 5.04 percent.

Its net interest income increased by 6% year on year to 1,027.1 crore in the June quarter, up from 969.5 crore in the same period last year. The net interest margin stood at 4.36 percent.

The bank's interest earned rose slightly over 3 percent to 2,089 crore in Q1FY23 in comparison with 2,026 crore in Q1FY22.

On the asset quality front, RBL Bank's gross NPA stood at 4.08 percent in this quarter as against 4.4 percent in the previous quarter, while net NPA stood at 1.16 percent versus 1.34 percent in the previous quarter.

Furthermore, the stock still has a long way to go before reaching its 52-week high It is currently trading 45% below its 52-week high of 221.3 and 38% above its 52-week low of 74.2.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 25 Aug 2022, 12:21 PM IST