Stock hits 6-month high as technical indicators turn bullish; improving asset quality and low P/B ratio attract value investors despite earnings volatility
June 19, 2025: RBL Bank shares rallied 4.28% on June 18, touching ₹228.43, as technical charts indicated a bullish breakout and investor sentiment shifted positively. The stock is now trading at 6-month highs, delivering over 39% returns in the last six months, despite a challenging earnings year.
With near-term resistance at ₹245, the bank’s price action suggests more upside, provided broader market momentum sustains.
📊 Technical Setup: Breakout Confirmed, Momentum in Play
- Support Zone: ₹215–₹217
- Entry Range: ₹228–₹230
- Stop-Loss: ₹212
- Targets: ₹235, ₹240, ₹245
Analysts highlight positive cues from MACD, Bollinger Bands, and trend confirmations across weekly/monthly timeframes. While momentum oscillators like KST urge caution, the broader consensus remains optimistic.
📉 Q4 FY25 Financials: Profit Slips but Core Income Up
- Net Profit: ₹69 crore (down 81% YoY)
- Interest Income: ₹3,476 crore
- Total Income: ₹4,476 crore
- Provisions: ₹785 crore (up sharply YoY)
Despite the bottom-line disappointment, gross NPAs improved to 2.6% and net NPAs to 0.29%, reflecting stronger risk management. Full-year FY25 profit stood at ₹695 crore vs ₹1,168 crore in FY24.
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🏦 Capital and Risk Profile: Solid Cushion, No Dilution Plans
- CET1 Ratio: 14%
- Capital Raise: None planned in FY26
With no equity dilution on the horizon and a robust capital position, the bank is focusing on internal accruals and cost discipline.
🔄 Leadership Revamp & Market Engagement
June 2025 saw new leadership in retail banking, signaling strategic focus on franchise expansion. Investor and analyst meets point to a transparent approach to rebuilding market confidence.
📈 Brokerage Views: Mostly Positive With Target Range ₹230–₹250
| Research Firm | Date | View | Target Price | Rationale |
|---|---|---|---|---|
| The Hindu Business Line | June 19 | Buy/Accumulate | ₹250 | Breakout confirmed, strong tech support at ₹215 |
| INDmoney | June 17 | Buy | ₹235 | Uptrend with 20-DEMA backing |
| Investec | May 26 | Buy | ₹230 | Low credit costs, stable CET1 |
| S&P Global | June 2025 | Hold/Buy | ₹210.63 | Volatile earnings but upside potential |
💸 Valuation Snapshot: Undervalued, But Not Risk-Free
- P/E Ratio: 19.36
- P/B Ratio: 0.93 (below book value)
- Intrinsic Value: Estimated at ₹291.80
- Dividend Yield: 0.63%
RBL trades at a discount to intrinsic value, making it a value bet for risk-tolerant investors.
🔍 Peer Comparison: Still a Lagging Contender
| Bank | 1-Year Return | P/E | P/B | Gross NPA | Net NPA |
|---|---|---|---|---|---|
| RBL Bank | -13.2% | 18.44 | 0.84 | 2.6% | 0.29% |
| HDFC Bank | 22.5% | Higher | Higher | Lower | Lower |
| ICICI Bank | 26.6% | Higher | Higher | Lower | Lower |
While RBL lags in returns, it stands out for deep valuation and improving asset health.
✅ Investment Takeaway: Accumulate with Caution
RBL Bank’s breakout and improving fundamentals suggest short-term upside potential to ₹250. Long-term re-rating hinges on earnings normalization, credit cost control, and stable leadership.
Ideal for:
- Tactical traders with tight stop-loss strategies
- Long-term investors looking for a second-tier private bank turnaround
Quarterly tracking remains critical. Buy on dips with medium-term conviction.
Tags: RBL Bank, Banking Stocks, Share Market Today, Technical Breakout, Private Banks, Asset Quality, Q4 FY25 Results, NPA, Investment Ideas, Indian Stock Market
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