Ahead of Diwali, bank stocks rally on strong Q2 earnings; RBL Bank up 9% on Emirates NBD deal

Bank stocks

Indian banks stock rallied and rose in the range of 4-18 percent during the afternoon trade after the strong earning in the second quarter of the current financial year and ahead of Diwali holidays. RBL Bank zooms over 9 percent after Emirates NBD announced plan to acquire a majority stake in the bank.

According to the BSE, South Indian Bank stock rose 18.62 percent in afternoon trade to Rs 38.74 a share, DCB Bank shares were trading 13.43 percent higher to Rs 146.10 a share, and Federal Bank shares rose 7.49 percent to Rs 228.30 a share.

Further, Bank of India’s stock was up 5.15 percent, Bank of Maharashtra was up by 4.47 percent, Indian Bank was up by 4.29 percent, Indian Overseas Bank was up by 4.92 percent, Punjab National Bank was up by 4.48 percent, and Canara Bank was up by 2.95 percent.

DCB Bank’s share price surged after strong operational metrics and lower credit costs drew positive brokerage reactions. The lender reported a 19 percent year-on-year rise in net profit to Rs 184 crore for Q2 FY26.

Brokerages viewed the performance positively. Analysts at Anand Rathi Research said the bank’s emphasis on operational efficiency, asset quality and diversified income streams positions it favourably for sustained growth and profitability. Dolat Capital noted that slippages excluding gold loans stood at 2.5 percent and that reducing this to 2 percent would aid operating expenses.

On Punjab National Bank, Motilal Oswal Financial Services in its report said that the bank reported an in-line quarter, as lower opex has been offset by lower other income and higher provisions. “We fine-tune our earnings estimates and expect RoA/RoE at 1.03%/15.4% in FY27.”

Shares of RBL Bank jumped more than 9 percent after Emirates NBD announced plan to acquire a majority stake in the listed domestic private sector lender.

Earlier on October 18, Emirates NBD Bank and RBL Bank approved the plan to enter into definitive agreements for the banking giant from the Middle East to acquire a controlling stake in the Indian private lender through a primary infusion of approximately $3 billion (approximately Rs 26,850 crore).

On October 13, Moneycontrol was the first to report that Emirates NBD had entered advanced talks to acquire a majority stake in RBL Bank in a mega proposed transaction which would trigger an open offer. The report mentioned that the preferential route was likely to be used for the deal which would be subject to RBI approval.