RBL Bank Q4 Results Review: Cleaner Slate Ahead, But Growth Challenges Persist, Say Analysts

RBL Bank Ltd.’s fourth quarter results showed progress on asset quality, but brokerages remain divided on the pace of recovery. While credit costs remained elevated, slippage trends in the unsecured book showed visible improvement, leading to a cautious optimism.

• Maintained 'underperform' rating and raised target price to Rs 175 from Rs 150.

• Lender saw stable NIMs, 2.4% QoQ loan growth, and strong 8.4% QoQ CASA growth, BofA said.

• Full provisioning against MFI GNPA and 75% coverage on SMA pool.

• Accelerated MFI provisioning sets a cleaner slate for fiscal 2026.

• Unsecured book slippages likely peaked.

• Overall fiscal 2026 loan growth target is 16-18% with strong growth in secured retail.

• Management expects recovery in financial year 2026 RoA with significantly lower credit costs.

• Bank is comfortable with current CET1 level and expects no capital raise in fiscal 2026.

• Maintained 'underweight' rating with a target price of Rs 140.

• Gross and net slippages, albeit elevated, improved quarter-on-quarter in both the MFI and credit card books.

• Bank could look to raise capital at 12.8-13% CET1.

• Cautions that a valuation re-rating may take time, given slow improvement in return ratios.

• Guidance indicates that book mix will continue to shift away from unsecured. This will continue to weigh on margins.

• Maintained 'buy' rating and raised target price to Rs 230.

• Highlighted that stress in JLG and credit card portfolios has largely stabilised.

• Credit costs peaked at 3.7%, expected to fall below 2% in financial year 2026.

• Expects strong growth in retail secured and commercial banking segments.

• Views current valuation (0.6 times fiscal 2027E book) as inexpensive.

• Growth would be led by retail secured and commercial banking.

• With stress recognition and provisioning almost behind, RoA visibility improves.