RBL Bank Shares Plunge Despite Triple Profit Growth

RBL Bank shares experienced their steepest decline in nearly two years on Tuesday, falling 7.55% to ₹388.30 on the BSE. The sell-off occurred despite the bank reporting a 2.7-fold year-on-year increase in net profit, which reached ₹482 crore for the July-September quarter of FY27.

Investors reacted negatively to a 53% year-on-year increase in provisions, which rose to ₹766.5 crore. This cost offset other positive indicators, including a 37% rise in net interest income and a net interest margin expansion to 4.61%.

Bank management expects margins to soften in the third quarter before recovering in the fourth quarter. This recovery is anticipated to be driven by repo rate increases and the deployment of surplus liquidity into secured retail and wholesale lending. The bank also anticipates a 50-60% decline in annual bancassurance income following proposed measures from the insurance regulator.

Market analysts remain divided on the bank's valuation. Goldman Sachs and CLSA set target prices at ₹310, while Citi maintained a more optimistic target of ₹505.