Bank stock to buy now for an upside of 38%; Recommended by ICICI​‍​‌‍​‍‌​‍​‌‍​‍‌ Securities

Synopsis: RBL​‍​‌‍​‍‌​‍​‌‍​‍‌ Bank is in focus as ICICI Securities predicted a robust xx% upside, which is mainly supported by a USD 3 billion capital injection from Emirates NBD. According to the brokerage, this one-time event could significantly change the bank’s financial strength, expansion trajectory, and net ​‍​‌‍​‍‌​‍​‌‍​‍‌profit.

The shares of this leading bank engaged in providing specialised services under five business verticals, namely: Corporate Banking, Commercial Banking, Branch & Business Banking, Retail Assets, and Treasury & Financial Markets Operations, are in focus after ICICI Securities sees a staggering xx percent upside in the bank. In this article, we will dive more into the details of it.

With a market capitalisation of Rs 19,219 crore, the shares of RBL Bank Ltd closed at Rs 311.25 per share on Tuesday, up 3 percent from its previous day’s closing price of Rs 301.75 per share. Over the past five years, the stock has delivered a poor return of 32 percent, underperforming NIFTY 50’s positive return of 92 percent.

Analyst Comments

Leading domestic brokerage house, ICICI Securities, has maintained its Buy call on RBL Bank and has set a target price of Rs 415 per share, signalling an upside of 38 percent from its previous day’s closing price.

ICICI​‍​‌‍​‍‌​‍​‌‍​‍‌ Securities feels that RBL Bank is stepping into a new era of transformation mainly because of the USD 3 billion capital infusion from Emirates NBD (ENBD). Essentially, this move is going to considerably lengthen the bank’s net worth, capital ratios, technology capabilities, and funding competitiveness. 

Together with the help, RBL can extend its footprint faster not only in retail but also in MFI and card businesses. The brokerage estimates RBL’s Return on Assets (RoA) rise from 1 percent to 1.5%, which is a significant change from previous levels, while Return on Equity (RoE) may still be in single digits due to lower leverage.

The company also points out that the bank will probably function as a subsidiary of ENBD, thus having a long-term strategic companion, but still being listed in India. The management is optimistic about getting regulatory approvals, and the step may give ENBD the option of maintaining ‘control’ for a longer period, which seems to be a crucial factor for both parties. ICICI Securities considers this arrangement a plus in terms of stability and growth, particularly because RBL is going to take over ENBD’s Indian branches as well.

On the operations side, ICICI Securities is predicting that NIMs and RoA will get better in a few quarters as they would have reached their lowest point.  Microfinance (MFI) is likely to keep growing at a good pace with asset quality getting better, while credit card slippages may stay at a high level but should stabilise as growth picks up to 7–8% YoY by FY26. The brokerage sees RBL as offering an attractive risk-reward with limited downside which is also probable because of the expected open offer around Rs 280 per share, thus raising investor confidence, alongside rising profitability, improved distribution, and a stronger balance ​‍​‌‍​‍‌​‍​‌‍​‍‌sheet.

Financial and Other Highlights

RBL Bank reported a Net Interest Income (NII) of Rs 1,551 crore in Q2 FY26, representing a 4 percent decline from Rs 1,615 crore in Q2 FY25. However, it recorded a slight growth of 5 percent from its previous quarter figure of Rs 1,481 crore.

Coming to its profitability front, RBL Bank reported a net profit of Rs 179 crore in Q2 FY26 as compared to Rs 223 crore in Q2 FY25, which is a decline of 20 percent from Rs 223 crore. Additionally, it recorded a decline of 11 percent from its previous quarter profit of Rs 200 crore.

RBL​‍​‌‍​‍‌​‍​‌‍​‍‌ Bank is an Indian commercial bank that provides a wide range of daily banking services to individuals and businesses. Some of the products and services it offers include savings accounts, current accounts, fixed deposits, and different types of loans (home, personal, business, vehicle, and small rural loans). In addition, it offers insurance, mutual funds, and other investment products, credit cards, and digital banking.

For businesses, the bank provides funds through corporate loans, trade finance, cash management, and foreign exchange services. With its extensive network of branches, ATMs, and business correspondents, RBL Bank is the one-stop solution for retail customers, companies, NRIs and rural borrowers all over ​‍​‌‍​‍‌​‍​‌‍​‍‌India.

Written by Satyajeet Mukherjee

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