Mumbai: RBL Bank Ltd, a notable name in the Indian banking sector, has seen its share price drop by 15.35% from its one-year high of Rs 251.20, reached on July 27, 2023. The bank’s shares experienced a decline of 1.61% during Monday’s trading session, closing at Rs 212.65, down from the previous close of Rs 216.15. This recent dip has led to questions about the stock’s potential to retest the Rs 250 level in the near future.
RBL Bank’s journey over the past year has been remarkable, with its share price achieving a staggering gain of nearly 120%. Furthermore, the scrip has shown impressive performance on a year-to-date basis, being up by 19%, and over the past month, registering a 16% increase. However, the recent decline has raised concerns among investors and analysts.
The bank’s fortunes were thrust into the spotlight a few weeks ago when Mahindra & Mahindra (M&M), a diversified conglomerate with interests ranging from technology to tractors, acquired a 3.53% stake in RBL Bank for a sum of Rs 417 crore. M&M also revealed its intention to increase its stake to 9.90% in the future, pending regulatory approval. Notably, any investor seeking to hold more than a 10% stake in a lender requires approval from the Reserve Bank of India (RBI).
On the technical front, market analysts are currently leaning toward a ‘bearish’ outlook for RBL Bank shares. Key support levels for the stock are predicted to be around Rs 211, followed by Rs 200 and Rs 190. Vaishali Parekh, Vice-President of Technical Research at Prabhudas Lilladher, remarked that the stock has undergone a minor correction from the Rs 251 zone and is currently finding near-term support around Rs 208. She added that a significant upward bias would require the stock to cross the Rs 224 mark, potentially leading to further gains.
Osho Krishan, Senior Analyst of Technical & Derivative Research at Angel One, highlighted the bank’s robust performance over the current financial year, during which it surged by almost 80%. Krishan believes that the recent correction is a healthy consolidation after the substantial gains, pointing out that the Rs 200-190 range represents the next set of support levels in the near term. However, he also indicated that Rs 240-250 could pose a formidable hurdle for the stock’s upward momentum.
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, identified a challenging resistance level for RBL Bank shares at Rs 250. Patel suggested that an ideal buying opportunity might arise in the Rs 195-200 range, with a potential upside to Rs 245. He advised setting a stop loss at Rs 180.
AR Ramachandran from Tips2trades offered a cautious assessment, deeming RBL Bank’s daily charts as bearish, with strong resistance at Rs 219. He warned that a daily close below the Rs 211 support could lead to a target of Rs 192 in the near term.
As RBL Bank navigates these fluctuations, the broader Indian equity benchmarks have experienced their own share of market movements. While RBL Bank’s recent decline may raise questions, it’s important to consider the bank’s strong performance over the past year and its potential to regain lost ground as market conditions evolve.
