RBL Bank Q3 Results Review — Weak Quarter With Sharp Rise In Stress; Dolat Capital Maintains 'Add'; Revises TP

RBL Bank has executed healthy growth metrics, granular liability profile, and increased focus on secured retail products. .NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.RBL Bank Ltd. reported negligible profit after tax (loss at PBT level) led by a sharp rise in credit costs (5.3%) despite higher one-off trading gains and favorable tax order of Rs 1.5 billion. Net interest margin (-15 bps to 4.9%) was impacted by high interest reversals and lower JLG disbursals. In Q3, 8% of MFI book (non-annualized) slipped to NPA and similar amount is guided to slip in Q4. While slippage (at 6%) increased by 28% QoQ, provisions nearly doubled as the bank accelerated provisions on MFI book, with 900 bps rise in sequential provision coverage ratio to 82% (net non-performing asset at 0.5%, -26 bps QoQ). Additionally, significant write-offs helped stable gross non-performing asset ratio QoQ at 2.9%. The bank will likely utilize Rs 2.7 billion of contingent provisions in Q4. We lower FY25E earnings by 25%, factoring higher credit costs and slower growth. Maintain ‘Accumulate’ rating, valuing the bank at 0.6 Sep-26E PBV with revised target price of Rs 180. While we acknowledge green shoots like peaking MFI stress (in Q4), front-ending of provisions, opex efficiencies, and undemanding valuations, we remain cautious on weak risk-return metrics and possible negative surprises stemming from seasoning of secured retail portfolios..Click on the attachment to read the full report:.Metro Brands Q3 Review — Inline Results; Motilal Oswal Retains 'Buy' On The Stock; Hikes Target Price.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

RBL Bank Q3 Results Review — Weak Quarter With Sharp Rise In Stress; Dolat Capital Maintains 'Add'; Revises TP

Despite undemanding valuations, the brokerages' ‘Accumulate’ stance is driven by RoAs being non-commensurate with risks and concerns on seasoning of newer portfolios.

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