Reliance Industries, RBL Bank, DCB Bank Q4 Results Review: HDFC Securities

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HDFC Securities Institutional Equities

Reliance Industries - Decent show by Jio platform but O2C still down YoY

Our Add rating on Reliance Industries Ltd. with a price target of Rs 1,655/share is premised on -

1. Ebitda growth in the digital business, driven by improvement in average revenue per user, subscriber addition, and new revenue streams;

2. recovery in the O2C margin; and

3. potential for further value unlocking in the digital and retail businesses.

RIL’s consolidated Q4 FY25 Ebitda stood at Rs 438 billion (+3.1% YoY, +0.1% QoQ) and APAT at Rs 194 billion (+2.4% YoY; +4.7% QoQ), below our estimates, due to lower gas production and weaker-than expected transportation fuel cracks.

RBL Bank - Accelerated provisioning; portfolio stability still elusive

RBL Bank Ltd.’s Q4 FY25 earnings were muted, owing to sustained accelerated provisioning in the MFI and credit card portfolios as stress levels continued to stay elevated.

Loan growth moderated to 10% YoY for FY25 (FY24: 20%) with de-growth in unsecured segments. Deposit growth (7% YoY) was sluggish with the CASA ratio improving to 34.1% (+135bps QoQ) on account of seasonality in current account balances (+22% QoQ).

While the management has guided for normalisation of credit costs in H2 FY26, we argue that stability in earnings shall be protracted, given significant portion of the loan book remains unsecured (28%) adding volatility to earnings, while the bank is still building out its secured retail business.

We raise our FY26/27E earnings estimates by 1%-2%, factoring in downward normalisation of credit costs, which is offset by margin pressures owing to a rate cut cycle and higher secured asset mix. We maintain Reduce with a revised target price of Rs 165 (0.6x Mar-27 adjusted book value per share).

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