YES Bank Ltd. share price target

Yes Bank continued to see high loan slippages of Rs59.5bn into NPA with 60% being from BB & below book and 40% from outside the identifie d stressed BB & below book which was key negative. Also, the BB & below book saw jump from 9% of exposure to 10% in Q2FY20 and notwithstanding the same, the BBB & below also saw jump of 21% QoQ to 21% of exposure (320bps QoQ jump) due to downgrades from higher buckets. Higher additions to lower buckets & lumpy exposures remains a big risk to asset quality added by sluggish resolutions. By consolidating b/s bank has been able to conserve...

Advances growth slumped to 10.1% YoY to | 236300 crore, led by lower growth capital & restructuring in corporate book. Subdued loan growth was courtesy de-growth of 13% YoY in MSME & slower growth in corporate book (64% of advances). Retail segment growth while healthy, moderated to 44% YoY, with resultant share up 1.6% QoQ to 18.3%. However, the management expects capital raising to be completed by Q2FY20, which is needed for growth and not balance sheet repair. Deposit growth was limited to 5% YoY at | 225902 crore, led by YoY, QoQ CASA de-growth....

Loans & Advances rose 10.1% YoY, led by strong growth of 43.3% from the Retail Banking division representing 18.3% of total advances. GNPA/NNPA ratio stood at 5.0%/2.9% in Q1FY20 vs. 1.3%/0.6% in Q1FY19, as a result of increasing bad loans....

moderation in business growth and elevated provisions impacted the earnings performance of the bank in Q1FY2020. Net Interest Margin (NIM) of the bank has declined to 2.8% in Q1FY2020 compared with 3.3% in the corresponding quarter last year. The loan growth of...

Steep rise in slippages alongwith bigger quantum of NPAs emanating from outside watchlist marks uncertainty over the future trajectory of asset quality. Capital infusion, the need of the hour, looks difficult to come by which mgmt. claims could happen in Q2FY20. Lower amount of...

Yes Bank recognized Rs62.3bn of slippages with large part coming from the watchlist and partly from BB & below book (non watchlist) impacting overall asset quality sharply. The bank also saw its BB & below book loans assets increase on net basis to 9.4% from 8.3% in Q4FY19 which puts asset quality under high risk as these are extremely lumpy exposures. On our deep dive we believe only certain part of exposure can be resolved quickly, while large part of exposure slipping into NPAs remains a high chance which we have factored in the same over FY20 & FY21. Although we take comfort from...

Yes Bank's (YES) Q1FY20 PAT at Rs 1.1bn beat our/consensus estimates on higher non-interest income a

We reduce our rating on Yes Bank from BUY to SELL with revised TP of 124, valuing the bank at 1x FY21e ABV on concerns of eroding balance sheet strength, rising NPAs, capital raising concerns and weak visibility of profits. In our view, credit cost for FY21 could disappoint street by large margin which we estimate to be at 1.8% and a miss on FY20 mgmt guidance of 1.25% vs. our estimation of 1.5%. Profits will drop over the next 2 yrs due to higher slippages and provisioning. Yes Bank could see fall in profits to the tune of ~25% in FY19e to 12.9 bn and ~70% in FY21e to 3.9 bn. Capital raising would therefore come at lower multiples going forward....

Yes Bank is India's fourth largest private sector Bank. The bank provides a range of services such as Corporate, Retail & SME Banking franchise, with a comprehensive product suite of Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and Transaction...

Hard Transition, Long Time for Capital Raise. Downgrade to Sell The bank reported a loss as higher provision on early recognition of stressed assets led to a rise in credit cost. The new MD, Mr. Ravneet Gill appears to be poised to change the DNA of the bank and adopt his MNC experiences. The bank is likely slowing the corporate asset growth, due to capital constraints, and is realigning corporate products. The bank has also aggressively recognized stressed assets and is likely to continue to assess losses based on time value erosion. The bank is further likely to invest in...