Shares of RBL Bank Ltd jumped 6.03% to ₹199.44 on Monday after the lender’s Q4FY25 earnings and improved asset quality prompted several brokerage firms to raise their target prices and ratings.
Despite an 80.5% year-on-year decline in standalone net profit to ₹68.7 crore in the March 2025 quarter (compared to ₹352.64 crore in Q4FY24), the improvement in asset quality and promising growth outlook supported positive sentiment around the stock.
RBL Bank’s net interest income (NII) slipped by 2% YoY to ₹1,563 crore, while the net interest margin (NIM) stood at 4.89%. However, asset quality showed significant improvement, with gross NPA reducing by 32 basis points QoQ to 2.60%, and net NPA falling 24 basis points QoQ to 0.29%.
On the growth front, retail advances rose 13% YoY to ₹55,703 crore, with the retail:wholesale mix standing at 60:40. Secured retail advances showed impressive growth of 43% YoY. Total deposits grew 7% YoY to ₹1,10,944 crore, and the CASA ratio improved to 34.1%.
Brokerage upgrades drive momentum
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Investec upgraded RBL Bank to Buy from Hold, raising the target price to ₹230 from ₹170. The brokerage highlighted declining slippages, cheaper valuations, and a projected improvement in return on equity (RoE) to 11% by FY27.
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IIFL maintained an Add rating while hiking the target price to ₹210 from ₹155, noting that credit costs are expected to decline, and loan growth momentum should revive in the second half of FY26.
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ICICI Securities upgraded the stock to Add from Hold, revising the target price to ₹210 from ₹175.
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SPARK Capital upgraded RBL Bank to Buy from Reduce and sharply raised the target price to ₹239 from ₹94.
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Motilal Oswal Financial Services (MOSL) upgraded RBL Bank to Buy from Neutral, increasing the target price to ₹220 from ₹170.
Despite the fall in profits, the sharp improvement in asset quality, healthy deposit growth, and aggressive brokerage upgrades fueled strong buying interest in RBL Bank shares today.
