ICICI Securities has issued a buy rating on RBL Bank with a revised target price of ₹430, up from the previous target of ₹390. According to the research report dated July 19, 2026, the brokerage maintains its constructive outlook on the transformational story and unique positioning of RBL within mid-small private banks. The target price is based on approximately 1.4x FY28E adjusted book value, compared to the earlier valuation of around 1.3x.
RBL Bank reported a muted Q1FY27 profit after tax of ₹2.5 billion with a return on assets of 57 basis points. As reported by ICICI Securities, the bank demonstrated strong loan growth of 23% year-on-year, though net interest income growth lagged significantly at 12% YoY and -1% quarter-on-quarter. The growth was primarily driven by wholesale lending, which increased 38% YoY, and secured retail lending, which grew 18% YoY, while unsecured retail lending expanded 8% YoY.
The bank experienced significant margin compression with net interest margin shrinking 28 basis points quarter-on-quarter and approximately 50 basis points since Q3FY26. According to ICICI Securities, deposits declined 10% QoQ as RBL consciously chose not to renew certain wholesale deposits. The CASA ratio dropped 20% QoQ, even when adjusted for seasonality, leading to a 17 basis points QoQ increase in cost of funds.
RBL Bank expects a 30-40 basis points NIM rebound in the near term and anticipates credit card stress to improve materially in the second half of FY27. As reported by ICICI Securities, the brokerage remains constructive on the bank's transformational story and unique positioning within the mid-small private banking segment. The revised target price reflects confidence in the bank's ability to navigate current challenges and capitalize on its strategic advantages.
