RBL Bank shares tumble over 7% despite 170% YoY growth in Q2 profits; here’s what's weighing down the stock

Private sector lender RBL Bank shares tumbled more than 7% after the opening bell on Tuesday, October 13, as investors reacted to the company’s July to September quarter earnings performance trailing behind expectations amid elevated credit costs, equity fundraising impact and muted EPS growth.

NSE data showed that RBL Bank shares declined 7.1% to touch an intraday low of ₹388 apiece on Tuesday’s market, in comparison to ₹417.70 apiece at the previous equity market close.

Trading activity surpassed 1.54 crore equity shares as of the morning trade, marking over 5 times growth in overall trading volumes in comparison to the one-week average activity of 30,33,185 equity shares.

The high-volume loss was triggered on Tuesday’s market, as the stock witnessed a 4.6 times growth in its trading activity when compared to the past two-week average volumes of 33,61,214 equity shares.

As of 10:16 am (IST), RBL Bank shares were trading 5.5% lower at ₹394.40 apiece during the trading session on October 13.

Why are shares falling despite earnings growth?

In the Q2 FY27 earnings, RBL Bank posted a 170% surge in its standalone net profit to ₹482 crore, in comparison to ₹179 crore in the corresponding quarter of the previous financial year, as per the NSE filing.

The data further showed that the lender’s net interest income advanced 37% year-on-year (YoY) to ₹2,131 crore in the September quarter, from ₹1,551 crore in the same quarter the previous year.

The private sector bank’s net interest margin (NIM) improved by 48 basis points to 4.61%, from 4.13% in the same period a year ago.

Despite the healthy overall Q2 growth, a deeper dive into the financials showed that the bank’s credit cost increased 53% on a year-on-year basis to ₹771 crore, from earlier ₹503 crore levels.

Experts from Citibank said that the credit cost increase in the September quarter is largely due to standard asset provisioning and persistent card stress. The investment firm expects the credit cost to normalise to 6% in the second half of FY27.

Apart from the higher-than-expected credit cost increase, the impact of the latest equity fundraise on the profit and NII figures in the September quarter added to the subdued sentiment among investors. An equity fundraise increases the bank's interest income as the lender has more capital to deploy, expanding the NIM and overall profitability.

“Reported Q2 FY27 PAT was helped by the capital raise. This was reflected in strong net interest income growth as the full benefit of the equity raise came through this quarter,” said analysts from Goldman Sachs.

Earlier filings showed that RBL Bank’s board approved the lender’s plan to raise up to $1 billion in funds from foreign investors through bonds via its Euro Medium Term Note Programme.

“On the lending side, growth remains driven by lower-yielding wholesale and secured retail loans,” said analysts from CLSA.

Data also showed that RBL Bank’s EPS witnessed muted growth to ₹3.11 apiece in the second quarter, from ₹2.92 apiece in the same period a year earlier.

Is there turnaround potential ahead?

After reviewing the Q2 fine print, experts from Goldman Sachs said that the turnaround potential ahead is expected to be gradual, aided by the stronger-than-expected FCNR(B) inflows.

“Raise earnings by 11%/12% in FY28/FY29 helped by stronger-than-expected FCNR(B) flows. We believe turnaround will be gradual, and valuations at 19x FY28 EPS, more than prices that in,” said the analysts.

In line with the growth outlook, analysts from Citibank said that they expect 35% growth in the full year FY2027, and predict 20% growth through the fiscal year 2028 and 2029.

RBL Bank share price trend

NSE data showed that RBL Bank shares have gained 103% in the last five years and have delivered nearly 60% returns to investors in the last three years. The bank stock has risen 35% in the past one-year period.

On a year-to-date (YTD) basis, RBL Bank shares have risen 24%, but are down 4.4% in the past one-month period. The exchange data also showed that the company's shares have declined nearly 5% in the last five sessions.

The company’s market capitalisation (m-cap) was at ₹60,787 crore as of the trading session on Tuesday, October 13, 2026.