RBL Bank shares slide 8% as Q3 profit misses street's estimates

Shares of RBL Bank tumbled over 8 per cent on Monday after the lender reported a lower-than-expected bottom line in the third quarter of the current financial year (Q3-FY26). 

 

The lender's stock fell as much as 8.46 per cent during the day to ₹297.15 per share, the biggest intraday fall since October 21, 2024. The stock pared losses to trade 7.3 per cent lower at ₹300.8 apiece, compared to a 0.62 per cent decline in Nifty 50 as of 11:42 AM. 

 

Shares of the company snapped a three-day winning streak on Monday and currently trade at 7.8 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 4.8 per cent this year, compared to a 2.2 per cent decline in the benchmark Nifty 50. RBL Bank has a total market capitalisation of ₹18,545.55 crore.

 

RBL Bank Q3 results

RBL Bank reported Q3FY26 profit after tax of ₹214 crore, a 20 per cent miss versus Motilal Oswal's estimates, though up 20 per cent quarter-on-quarter (Q-o-Q), largely due to higher-than-expected provisions. This was partly offset by higher other income, the brokerage said. 

 

Net interest income rose 4.6 per cent year-on-year (Y-o-Y) and 6.9 per cent sequentially to ₹1,660 crore, in line with expectations. Net interest margin expanded 12 basis points Q-o-Q to 4.63 per cent, aided by a decline in cost of funds.

 

Other income increased 13 per cent Q-o-Q but declined 2 per cent Y-o-Y to ₹1,050 crore, beating estimates by 6 per cent, driven by healthy fee income. Treasury gains jumped to ₹91.3 million from ₹6.7 crore in the previous quarter. Overall, total revenue grew 2 per cent Y-o-Y and 9 per cent Q-o-Q to ₹2,700 crore.

Motilal Oswal on RBL Bank earnings

Motilal Oswal said it has cut its FY26 earnings estimate for RBL Bank by 7 per cent to factor in higher near-term provisions, while maintaining its earnings estimates for FY27 and FY28. The brokerage noted that RBL Bank reported an earnings miss due to elevated provisions, even as pre-provision operating profit remained healthy, supported by stronger other income. 

 

Business growth was modest during the quarter; however, the bank has guided for healthy growth in wholesale advances of 20-25 per cent Y-o-Y and retail advances of 25-30 per cent Y-o-Y. The bank also plans to grow its unsecured loan book at a calibrated pace.

 

Motilal Oswal highlighted that a comfortable credit-deposit ratio and the expected capital infusion from Emirates NBD should support stronger credit growth. With an aggressive provisioning policy, the brokerage expects a gradual improvement in asset quality, with slippages likely to moderate as conditions in unsecured lending improve.

 

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