RBL Bank shares plunged 8.5 percent to Rs 382 apiece on Tuesday, making the private lender the biggest loser on both the BSE 500 and Nifty 500 indices, despite reporting a nearly threefold increase in its fiscal second quarter net profit. The sharp selloff came as concerns over elevated credit costs, sluggish core retail loan growth and expensive valuations overshadowed improvements in profitability and net interest margins.

Brokerages remained divided on RBL Bank stock outlook following its Q2 FY27 results. Goldman Sachs and CLSA maintained bearish ratings with identical target prices of Rs 310, citing concerns over the pace of the turnaround and return ratios. However, Citi retained its bullish stance with a target price of Rs 505, betting on improving margins and strong earnings growth.

RBL Bank reported a 169 percent year-on-year rise in standalone net profit to Rs 481.7 crore for the July-September quarter, while net interest income (NII) grew 37.4 percent to Rs 2,131 crore. Net interest margin (NIM) expanded to 4.61 percent from 4.13 percent sequentially.

Asset quality improved, with the gross NPA ratio declining to 1.02 percent from 1.30 percent in June. However, provisions rose to Rs 766.5 crore from Rs 599.2 crore sequentially, reflecting continued credit cost pressures. Net advances grew 42 percent year-on-year, while deposits increased 34 percent, aided by foreign currency non-resident (FCNR) inflows under the RBI's special scheme.