RBL Bank shares jump 21% in one month: What's driving the rally?

RBL Bank

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

The shares of RBL Bank jumped over 4 percent on July 1, extending gains for the fourth consecutive session. The shares of the lender have seen significant surge recently, surging over 21 percent in the past one month.

RBL Bank shares have gained over 64 percent in the past six months, and over 7 percent in the past five days. The stock has recorded gains in seven out of the past eight sessions. It currently has a P/E ratio of over 21.

Multiple factors may have contributed to the uptrend in the lender's shares.

Citi Research opened a 90-day positive catalyst watch on RBL Bank, expecting an improvement on RoA (Returns on assets) going ahead. The international brokerage reiterated its bullish 'buy' call on the lender, hiking its target price to Rs 285 per share from Rs 230 per share. This indicates an upside potential of nearly 15 percent from the previous closing price.

The brokerage believes that the RoA trajectory can improve to 45-50 basis points, driven by the much-awaited normalization of credit costs. According to the brokerage, accelerated provisioning on joint liability group/credit card segment will help normalise these costs.

Further Citi added that the stress in the joint liability group and credit card portions will subside further in Q1. RBL Bank's slippages are likely to moderate to 4.5 percent, down from 4.7 percent in Q4FY25.

The recent sharp rise in RBL Bank's share price accompanied the overall rally in bank stocks. The Nifty Bank index hit fresh all-time highs as a result, but is now seeing some correction. RBL Bank shares however bucked today's downturn in bank stocks to continue recording significant gains.

RBL Bank is aiming to widen its net interest margins (NIM) from retail assets by shifting the portfolio mix towards higher-yielding assets, Kumar Ashish, its head of retail assets and collections, told PTI. As part of the same strategy, the private sector lender will launch a commercial vehicle (CV) financing and used 4-wheeler finance in the next three months.

The lender had announced a dividend of Rs 1 per equity share while announcing its results for the fourth quarter of the financial year 2025 in April this year. The company had not announced the record date to determine the eligibility of shareholders set to receive the payment. Investors may anticipate its record date to be fixed in July, which may spike investor interest in the stock.