RBL Bank reported a miss on PAT led by higher opex as the bank invested towards in-house collections in cards portfolio. Slippage ratio at 4.6% was elevated, but credit costs at 190 bps were limited as the bank had provided ~75% PCR against JLG SMA book.
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Dolat Capital Report
RBL Bank Ltd. has gradually, but consistently improved share of granular retail deposits and is reducing share of unsecured micro finance /constant currency loans. However, this has impacted NIM and fee lines, which are settling at lower levels.
Moreover, while secured book is growing at a strong pace, recent delinquencies are on the rise and remains a monitorable. Management is not concerned over secured delinquencies at this point.
With 27% loan mix towards unsecured retail, FY26E RoAs at <1% is non commensurate with portfolio risks.
We revise our rating downward to โSell' owing to stretched valuations at 0.9x FY27E.
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