Why RBL Bank share price fell 9% today; fresh target prices 

Shares of RBL Bank Ltd tumbled 9 per cent in Monday’s trade after its December quarter results failed to meet expectations, as elevated credit costs continued while the bank cleaned up its portfolio. Analysts have largely cut FY26 earnings estimates by 7-12 per cent, citing higher near term provisions, retaining their 'Buy' call on the stock. 

ICICI Securities said while RBL Bank is confident of sequential growth revival, it flagged elevated card slippages likely persisting for the next two quarters. This is a slight dampener, as credit card is a high RoA business and industry AQ trends seem to be recovering. 

"We believe, RBL Bank should sharpen its collection infra, customer selection and engagement. Retain Buy; target revised to Rs 410 (vs Rs 415), based on 1.3 times FY28 ABV (vs 1.4 times FY27E ABV earlier)," the brokerage said. 

For Q3, Emkay Global said credit growth remained moderate at 14 per cent YoY, as unsecured loan growth was continued to be dragged by PL/Cards. It said gross slippages remained high at 3.5 per cent of loans, driven by elevated stress in credit cards due to delay in realigning collections from BAF to RBL Bank.

"We trim FY26E earnings by 11 per cent, factoring in the higher provisions, in turn led by higher write offs. However, we believe the bank is likely to see gradual improvement in RoA to 1-1.3 per cent, as unsecured retail stress eases, and the ENBD deal to boost it further as it benefits from lower CoF/higher growth. We retain BUY on the stock while keeping our target unchanged at Rs 375," it said.

Given higher near-term provisions, MOFSL cut its earnings estimate for FY26E by 7 per cent, while maintaining its earnings estimates for FY27 and FY28. "We estimate FY27E RoA and RoE of 1.4 per cent and 8.8 per cent, respectively. Reiterate Buy with a target price of Rs 370," MOFSL said.

Meanwhile, Elara Securities suggested 'Accumulate' on the stock. While strategic repair is underway, it said current valuation, after 21 per cent outperformance against the banking index in the past six months, capture the recent progress and residual risk fairly. 

"We await greater consistency in earnings and return ratios before turning more constructive. We retain Accumulate with a higher target of Rs 345 from Rs 315 based on 1.0x (unchanged) P/BV as we roll forward to December 2027E," Elara Securities said.