RBL Bank surges ~4% despite Q3 profit missing street estimates

20 Jan 2024 , 12:13 PM

RBL Bank shares jumped more than 4% in early morning trade on January 20 after the bank reported fiscal third-quarter earnings that fell short of Wall Street expectations. 

However, later in the day, the stock erased early morning gains.

At around 12.24 PM, RBL Bank was trading marginally lower at Rs 269.80, against its previous closing price of Rs 269.85 on NSE.

RBL Bank’s standalone net profit for October-December period increased 12% year-on-year to Rs 233 crore. However, disregarding the contingent provision on AIF investment of Rs 115 crore, net profit increased by 53% year-on-year to Rs 319 crore. The bank has set aside Rs 115 crore for provisions on AIF investments. Net interest income climbed 21% year-on-year to Rs 1,546 crore, while the net interest margin expanded to 5.52%.

Morgan Stanley issued a ‘underweight’ recommendation on the bank, stating that profitability recovery will be sluggish and lowering FY24 and FY25 projections due to one-time contingency reserves. The firm has set a target price of Rs 250 for RBL Bank, which is 3% lower than the previous day’s closing price.

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