RBL Bank Share Price Drops To 52-Week Low After Weak Q3 Results, Estimate Cuts

RBL Bank Ltd. share price dropped nearly 6% to a 52-week low during early trade on Monday after weaker-than-expected results for the quarter ended December which led to most brokerages trimming their earnings estimate.

The private lender reported higher-than-expected provisions and contraction in margins, with deterioration in asset quality amid high slippages, mainly in the microfinance segment. Net profit tanked 86% on a yearly basis to nearly Rs 33 crore.

Net interest income or core income barely rose by 3% year-on-year to Rs 1,585 crore as it was impacted by increased slippages.

Provisions for the quarter jumped nearly twofold on year to Rs 1,189 crore. This was largely because the bank had to make prudent additional provision of Rs 414 crore on its joint liability group loans. During Oct-Dec, the bank had written back tax provision of Rs 150.13 crore.

The private sector bank's asset quality deteriorated, with the gross non-performing assets ratio widening to 2.92% as of Dec. 31, 2024, compared to 2.88% in the previous quarter. However, net NPA ratio fell to 0.53% from 0.79% in the prior quarter.

Motilal Oswal Financial Services reduced its earnings per share estimates by 8.6% for 2025-26 and 10% for the next financial year as the asset quality will likely remain suppressed given the stress in the microfinance space.

RBL Bank share price dropped 5.8% intraday to Rs 146.1 apiece. The scrip was trading 2.3% lower at Rs 151.58 by 9:45 a.m. The benchmark NSE Nifty 50 was flat.

The stock has fallen 44% in the last 12 months. The total traded volume so far in the day stood at 7.8 times its 30-day average. The relative strength index was at 39.

Twelve out of the 23 analysts tracking RBL Bank have a 'buy' rating on the stock, five recommend a 'hold' and six suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price target of Rs 177.58 implies a potential upside of 16%.