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RBL Bank share price locked at 10% lower circuit after Q2 earnings

Foreign broking house JPMorgan has kept neutral call on RBL Bank with a target at Rs 200 per share.

October 29, 2021 / 09:46 AM IST
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The RBL Bank share price was locked at 10 percent lower circuit in the early trade on October 29 after the company posted a weak set of earnings for the quarter ended September 2021.

There were pending sell orders of 102,984 shares, with no buyers available.

RBL Bank on October 28 posted 78 percent fall in its net profit at Rs 31 crore for the second quarter of FY22 as against Rs 144 crore in the year-ago period.

Its net interest income fell to Rs 915 crore from Rs 932 crore a year back.

The gross NPA ratio was at 5.40 percent versus 4.99 percent and the net NPA ratio stood at 2.14 percent versus 2.01 percent over the previous corresponding period.

The provision coverage ratio was at 76.6 percent as against 76.3 percent in the previous quarter this year and 74.8 percent in the second quarter last year, clocking a 1.8 percent on-year rise.

Pre-provision operating profit (PPOP) growth was of 2 percent YoY to Rs 691 crore.

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"Our granular retail deposit traction continues to be robust. CASA deposits ratio reached an all-time high of 35.4 percent this quarter. At the same time, we have been improving our competitiveness by reducing our cost of funds," said Vishwavir Ahuja, MD and CEO, RBL Bank.

"The economic environment is bouncing back strongly as the pace of vaccination quickens in the country. Our bank is also confident of reverting to normalised levels of business, growth and profitability from the current (Q3) quarter itself and are on track to exit this financial year with strong profitability ratios setting us up well for FY23," he said.

Foreign broking house JPMorgan has kept neutral call on RBL Bank with a target at Rs 200 per share.

There was a weak print on both PPoP and asset quality. The management commentary was better with the company saying that worst is over for unsecured business and expects an improvement in upcoming quarters.

The stock may struggle given weaker print on asset quality and growth.

At 9:19am, RBL Bank was quoting at Rs 181.30, down Rs 20.10, or 9.98 percent, on the BSE.

Disclaimer: The above report is compiled from information available on public platforms. advises users to check with certified experts before taking any investment decisions.

Moneycontrol News
first published: Oct 29, 2021 09:45 am