Why Mahindras are Investing in RBL: Insights from Vinit Bolinjkar

Vinit Bolinjkar, Head-Equity Research, Ventura Securities, states that RBL Bank is a recommended stock to buy. The stock was initially recommended at Rs 130 with a target of Rs 260. Currently, it is trading at levels of 210-220. With Mahindra investing in RBL Bank, the corporate governance is expected to strengthen and the stock might witness a re-rating. Bolinjkar speculates that Mahindra Group invested in RBL Bank to understand the financial sector and associated risks. He also suggests that Mahindra may be bailing out of Kotak Bank and investing in RBL Bank due to its strong franchise and attractive valuation. There is a possibility that Mahindra might merge M&M Financial with RBL Bank in the future. In terms of other stocks, Bolinjkar finds Zomato’s recent earnings impressive and expects the stock to move up. He believes that the deserving market cap for Zomato could be around Rs 140 in the next few years, representing a 50% upside. Bolinjkar also expresses bullishness on Paytm and suggests that it has the potential to rally aggressively, with a personal target of Rs 1,300-1,400 per share. When discussing SBI’s numbers, Bolinjkar agrees that slippages were higher than expected, but overall performance was good and deserving of a re-rating. He also recommends buying Info Edge, as it gives exposure to Zomato and Policybazaar, along with a potential tech recovery. Bolinjkar believes that Escorts has a lot of steam left and expects it to move up sharply. He also identifies Welspun India as a stock with potential for significant growth over the next five years, driven by improved margins in the home textile business and the growth of their B2C platform in the consumer discretionary space.

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