RBL Bank Shares Plunge 7% Despite 6.5x Q3 Profit Surge; What Triggered Sell-off?

• RBL Bank shares fell 7% to Rs 302.30 on January 19, despite a 555.4% year-on-year net profit increase to Rs 213.88 crore in Q3 FY25.
• The decline was attributed to a sharp 40 basis point rise in credit cost to 2.5% due to higher write-offs in the credit card portfolio.
• Increased provisions, up 28% to Rs 639 crore, and a one-time expense of Rs 32 crore for new labor laws also impacted profitability.
• Management warned of emerging challenges in the credit card portfolio and potential slippages in the next two quarters.
• Brokerage CLSA maintained a 'Hold' rating with a target of Rs 310, while 13 out of 22 analysts recommend 'Buy'.

Why It Matters: RBL Bank's shares dropped despite strong Q3 profit due to rising credit costs, higher provisions, and management warnings.