Morgan Stanley has maintained its equal-weight rating on RBL Bank Ltd. and raised its target price to Rs 335 from Rs 305. This comes at the back of the completion of a Rs 26,000-crore capital infusion by Emirates NBD Bank.
The current market price is Rs 363.50 and the revised target price implies a potential downside of 7.8%. The brokerage said its equal-weight stance reflects its view that the stock is fully valued at current levels.
Morgan Stanley raised its profit-after-tax estimates following the completion of the capital infusion and introduced estimates for FY29. However, its earnings-per-share estimates were cut by 52% for FY27 and 42% for FY28 due to the increase in the bank's share count following the equity issuance.
The Rs 26,000-crore investment by Emirates NBD received final regulatory approvals in May 2026, and the transaction was completed at the end of June. Morgan Stanley has now factored the capital infusion and its implications for RBL Bank's balance sheet, growth and profitability into its forecasts.
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Morgan Stanley raised its loan growth forecasts for FY27 and FY28 to 25% each, from 15% previously. It also expects loan growth of 25% in FY29, driven by RBL Bank's strengthened capital position and robust expansion in its corporate loan book.
Deposit growth, however, is expected to moderate to 11% in FY27, against the brokerage's previous estimate of 15%, as the bank is likely to reduce its exposure to high-cost wholesale deposits. Deposit growth is projected to improve to 30% in both FY28 and FY29.
The brokerage expects the fresh capital to support an improvement in RBL Bank's net interest margin. It now forecasts NIM at 4.88% for FY27 and 5.25% for FY28, compared with its previous estimates of 4.87% and 4.78%, respectively.
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