RBL Bank Shares Jump 7% Despite 80% Drop in Q4 Profit: Here’s Why
Despite a major fall in its Q4 net profit, RBL Bank’s share price soared by 7%. Experts say strong balance sheet signs, better asset quality, and positive future guidance are key reasons behind this surprising rally.
12:07 PM Apr 28, 2025 IST
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Aakash Khuman
RBL Bank Shares: RBL Bank’s net profit for the fourth quarter of FY25 dropped sharply by over 80% to Rs.68.7 crore. However, its share price jumped 7% to Rs.201.25 during Monday’s trading session.
The reason? Analysts say the bank’s performance matched expectations. Improvements in other areas like non-interest income and asset quality helped investors stay positive.
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Analysts See Early Signs of Recovery
Brokerage firm Centrum Broking pointed out that while credit costs remained high, the non-interest income (NII) performed better than expected. The bank also improved its Provision Coverage Ratio (PCR) by 700 basis points to 89%, thanks to Rs.2.73 billion from contingency provisions. Plus, gross slippages fell, and the SMA pool (Special Mention Accounts) shrank, indicating better asset quality ahead.
Balance Sheet Strength and Future Growth Plans
Experts believe RBL Bank ’s balance sheet is getting stronger. Management also shared a positive outlook, expecting growth and profitability to improve in FY26. Signs suggest that the worst phase of bad loans is over. This has boosted investor confidence despite the weak profit numbers.
Brokerages Upgrade Ratings and Raise Target Price
Motilal Oswal upgraded RBL Bank's rating from 'Neutral' to 'Buy' with a revised target price of Rs.220, and other brokerages like Centrum Broking maintained their 'Buy' call with a target of Rs.232.
They see good potential due to better business momentum, stronger returns, and improved operational efficiency expected in the coming quarters.
Key Highlights of RBL Bank ’s Q4FY25 Results
- Net Profit: Rs.68.7 crore (down 80.5% YoY)
- Net Interest Income (NII): Rs.1,560 crore (slightly down YoY and QoQ)
- Pre-Provision Operating Profit (PPoP): Rs.880 crore (up 1.3% QoQ)
- Gross NPA (GNPA): 2.6%
- Net NPA (NNPA): 0.3%
- Loan Growth Target for FY26: 16–18%
Management expects strong growth in secured loans and steady improvement in asset quality going forward.
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