RBLBANK - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:16 pm
Back to Fundamental ListFundamental Rating: 2.7
| Stock Code | RBLBANK | Market Cap | 18,528 Cr. | Current Price | 300 ₹ | High / Low | 332 ₹ |
| Stock P/E | 38.5 | Book Value | 259 ₹ | Dividend Yield | 0.32 % | ROCE | 6.04 % |
| ROE | 4.57 % | Face Value | 10.0 ₹ | DMA 50 | 303 ₹ | DMA 200 | 262 ₹ |
| Chg in FII Hold | -2.07 % | Chg in DII Hold | 0.91 % | PAT Qtr | 179 Cr. | PAT Prev Qtr | 200 Cr. |
| RSI | 43.1 | MACD | -2.69 | Volume | 29,43,475 | Avg Vol 1Wk | 41,04,776 |
| Low price | 146 ₹ | High price | 332 ₹ | PEG Ratio | 0.31 | Debt to equity | 8.32 |
| 52w Index | 83.0 % | Qtr Profit Var | -19.8 % | EPS | 7.87 ₹ | Industry PE | 14.7 |
📊 Financials: RBL Bank shows weak profitability with quarterly PAT declining (₹179 Cr vs ₹200 Cr). ROE at 4.57% and ROCE at 6.04% are below industry standards, reflecting poor capital efficiency. Debt-to-equity ratio of 8.32 is high, typical for banks, but adds leverage risk. EPS at ₹7.87 is modest relative to price.
💹 Valuation: Current P/E of 38.5 is significantly higher than industry PE of 14.7, indicating overvaluation. Book value ₹259 vs CMP ₹300 suggests a fair P/B multiple (~1.16x). PEG ratio of 0.31 shows some growth potential, but earnings contraction undermines valuation appeal. Intrinsic value appears lower than CMP, signaling caution.
🏦 Business Model: RBL Bank operates as a private sector bank with retail and corporate lending focus. Competitive advantage lies in niche retail lending and digital initiatives, but weaker profitability and asset quality concerns limit strength compared to larger peers.
📈 Entry Zone: Technically, support lies near ₹260–₹270 (DMA 200 zone). CMP at ₹300 is close to resistance (₹332). Entry is advisable only on dips closer to ₹260 for margin of safety.
📌 Long-term Holding: Given weak profitability, high valuation, and declining quarterly earnings, long-term holding requires caution. Investors should monitor asset quality and profitability trends before committing to extended positions.
Positive
- 📈 EPS of ₹7.87 supports earnings visibility.
- 🏦 Strong retail and corporate lending presence with digital initiatives.
- 📊 Increase in DII holdings (+0.91%) shows domestic institutional support.
Limitation
- ⚠️ High P/E ratio (38.5) compared to industry average (14.7).
- 📉 Weak ROE (4.57%) and ROCE (6.04%) reflect poor capital efficiency.
- 💸 Quarterly PAT decline (-19.8%) signals earnings pressure.
Company Negative News
- 📉 Decline in FII holdings (-2.07%) indicates reduced foreign investor confidence.
Company Positive News
- 📈 Increase in DII holdings (+0.91%) highlights domestic institutional support.
Industry
- 🏦 Banking sector trades at industry PE of 14.7, highlighting RBL Bank’s premium valuation.
- 📊 Sector outlook tied to credit growth, interest rate cycles, and asset quality improvements.
Conclusion
⚖️ RBL Bank is overvalued with weak profitability and declining earnings. Entry is advisable only near ₹260–₹270 support zones. Long-term holding requires caution unless profitability improves and valuations normalize.
Would you like me to extend this with a peer benchmarking overlay against mid-tier private banks like Federal Bank, IDFC First Bank, and Bandhan Bank to see relative efficiency and valuation?
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