1. At a Glance
Once a darling of midcap private banking, RBL Bank now finds itself somewhere between a turnaround story and a cautionary tale. The Q1 FY26 profit surged 192% QoQ to ₹200 Cr, but loan growth remains tepid and ROE is still crawling at 4.6%.
2. Introduction with Hook
RBL Bank is like that kid in class who got sent to detention, returned with a plan, but still hasn’t cracked the top 10.
- Q1 FY26 Net Profit: ₹200 Cr (QoQ growth: +192%)
- Gross NPA down to 2.78%
- Yet ROE remains sub-5% and interest income underwhelming
It’s a “turnaround candidate,” but it’s turning slower than a UPI transaction in no-network zones.
3. Business Model (WTF Do They Even Do?)
RBL Bank operates across five key verticals:
- Corporate Banking
- Commercial Banking
- Retail Assets
- Branch & Business Banking
- Treasury & Markets
Retail and MSME lending have been the renewed focus, with an increasing share of secured loans. They’re playing it super safe post-2020’s asset-quality mess.
4. Financials Overview
| Year | Revenue ₹ Cr | Net Profit ₹ Cr | EPS ₹ | GNPA % | NNPA % | ROE % |
|---|---|---|---|---|---|---|
| FY22 | 8,176 | -75 | -1.25 | 4.08% | 1.16% | -1.0% |
| FY24 | 12,394 | 1,168 | 19.3 | 2.92% | 0.53% | 8.0% |
| FY25 | 14,039 | 695 | 11.4 | 2.60% | 0.29% | 5.0% |
| TTM | 13,984 | 524 | 8.62 | 2.78% | 0.45% | 4.6% |
Plot Twist:
While asset quality has improved, profits have declined YoY — primarily due to rising operating expenses and heavy provisioning.
5. Valuation
- EPS (TTM) = ₹8.62
- P/E = 30.5x
- Book Value = ₹254
- P/BV = 1.04x
- ROE = 4.6%
Fair Value Range = ₹180 – ₹240
CMP = ₹263 → Clearly pricing in future optimism.
6. What’s Cooking – News, Triggers, Drama
🔥 Q1 FY26 Buzz:
- Net Profit: ₹200 Cr
- Advances up 9%, Deposits up 11% YoY
- NIM stable, capital adequacy at 15.42%
📌 Upcoming Triggers:
- Focus on retail secured lending
- Credit card business (in partnership model) expanding
- Reduction in low-yield assets
7. Balance Sheet
| Year | Equity ₹ Cr | Reserves ₹ Cr | Deposits ₹ Cr | Borrowings ₹ Cr | Total Assets ₹ Cr |
|---|---|---|---|---|---|
| FY20 | 509 | 10,074 | 57,812 | 17,007 | 88,978 |
| FY23 | 600 | 12,977 | 84,887 | 13,331 | 115,876 |
| FY25 | 608 | 14,829 | 110,944 | 13,734 | 146,725 |
Key Changes:
- Capital base expanded via QIP and retained profits
- Deposit franchise improved, but not top-tier
- No alarming rise in debt
8. Cash Flow – Sab Number Game Hai
| Year | CFO ₹ Cr | CFI ₹ Cr | CFF ₹ Cr | Net Flow ₹ Cr |
|---|---|---|---|---|
| FY23 | -11,044 | -223 | 2,239 | -9,028 |
| FY24 | +4,935 | -172 | +842 | +5,605 |
| FY25 | -842 | -263 | -503 | -1,608 |
Interpretation:
- Big volatility in operating cash flows
- FY25 back in red → Needs watching
- FY24 positive due to short-term funding tweaks
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| NIM (%) | ~4.4 | ~4.6 | ~4.7 |
| ROE (%) | 7% | 8% | 5% |
| GNPA (%) | 3.37 | 2.92 | 2.60 |
| NNPA (%) | 1.10 | 0.53 | 0.29 |
| CASA Ratio (%) | ~35 | ~38 | ~36 |
🟢 NPA metrics improved
🟡 ROE still underwhelming
🔴 CASA remains below top-tier peers like HDFC/ICICI
10. P&L Breakdown – Show Me the Money
| Year | Interest Income ₹ Cr | Other Income ₹ Cr | Net Profit ₹ Cr | EPS ₹ |
|---|---|---|---|---|
| FY22 | 4,149 | 2,341 | -75 | -1.25 |
| FY24 | 6,351 | 3,043 | 1,168 | 19.3 |
| FY25 | 7,576 | 3,806 | 695 | 11.4 |
Concern:
Too much reliance on other income (non-core operations), suggesting loan book profitability still shaky.
11. Peer Comparison
| Bank | CMP ₹ | ROE % | GNPA % | CASA % | P/BV | P/E |
|---|---|---|---|---|---|---|
| ICICI Bank | 1,426 | 18% | 2.0% | 43% | 3.26 | 19.2 |
| Axis Bank | 1,099 | 16.3% | 2.3% | 44% | 1.82 | 12.2 |
| IDBI Bank | 98.6 | 13.5% | 3.4% | 49% | 1.72 | 13.9 |
| RBL Bank | 263 | 4.6% | 2.6% | 36% | 1.04 | 30.6 |
Conclusion:
Valuation mismatch. Low ROE doesn’t justify the P/E multiple. Riding sentiment?
12. Miscellaneous – Shareholding, Promoters
| Category | Mar ‘23 | Jun ‘25 |
|---|---|---|
| FIIs | 28.27% | 17.56% |
| DIIs | 20.12% | 34.37% |
| Public | 54.32% | 47.67% |
Shifts:
- FIIs have exited significantly
- DIIs filled the void — a sign of cautious optimism?
- Public holding stabilizing
13. EduInvesting Verdict™
RBL Bank is like that contestant in a singing show who hit one great note in 2021 and has been trying to stay relevant since.
- ✅ NPA clean-up? Done.
- ✅ Profit restored? Slowly.
- ❌ Growth? Meh.
- ❌ ROE? Not yet
- ❌ Valuation? Bit inflated
If it continues to expand retail loan book smartly and boost core income — the story’s not over.
But today? It’s a show-me-don’t-tell-me kind of stock.
Metadata
– Written by EduInvesting Research | 20 July 2025
– Tags: RBL Bank, Private Bank, Q1 FY26 Results, ROE Tracker, Asset Quality, Turnaround Bank
