RBL Bank Target Price Raised by 11% to Rs 250 by Emkay — Should You Buy or Wait?

Brokerage firm Emkay has raised its target price for RBL Bank to Rs 250, marking an 11% increase from its previous estimate, while reaffirming a ‘Buy’ rating on the stock. This revision reflects growing confidence in the bank’s turnaround prospects following a challenging year of portfolio cleanup.

In a recent discussion with RBL Bank’s MD and CEO, R.S. Kumar, Emkay learned that the bank views the peak stress in its unsecured segments—microfinance and credit cards—as largely behind them. The management anticipates a cautious but steady return to growth, driven by a robust expansion of 25-30% in its secured loan book. Overall, loan growth is expected to reach 16-17% in the coming fiscal year.

Also Read: Why Did RBL Bank Share Price Zoom 10% Despite 76% Fall In Net Profit? Should You Buy? | Republic World

Emkay’s revised price target values the stock at 0.8 times the bank’s estimated adjusted book value for FY27, signaling a solid valuation grounded in improving fundamentals.

The brokerage expects RBL Bank to boost its return on assets (RoA) from a low of 0.5% in FY25 to a healthier range of 0.8% to 1.2% over the next two to three years, supported by better “operational efficiency” and a strategic shift towards secured retail and SME lending.

Capital adequacy remains a strength, with a comfortable CET 1 ratio of 14.1%. This positions the bank well to delay raising fresh capital until market conditions are more favorable, preserving shareholder value.

To strengthen its retail footprint, RBL Bank has made key hires in leadership roles focused on asset growth and collections. The bank aims to turn its retail portfolio profitable in FY26 by lowering credit costs and expanding its fee income streams.

With the toughest phase behind it, RBL Bank’s cautious recovery, improved margins, and sound capital position have convinced Emkay to upgrade its outlook. Investors are encouraged by the bank’s clear strategy to rebuild growth and profitability, justifying the higher price target and sustained positive rating.