YES Bank Ltd. share price target

Strong Performance on All Fronts: Upgrade to BUY YES Bank has delivered higher-than-estimated operating performance in 1QFY18 driven by (a) sharp sequential growth in NII aided by sequential improvement in NIMs of 3.7%; (b) stellar business growth led by consumer loans and corporate banking portfolio; and (c) sequential decline in provisioning expenses owing to higher upgrades and recovery coupled with lower fresh slippages. The Bank demonstrated all round improvement in asset quality front led by 89.5% QoQ decline in fresh slippages, 32.4% QoQ decline in gross NPA and 49.1% decline in net...

On the liability side of the balance sheet, around ~39% of Yes Bank's deposits is wholesale funded that is highly sensitive to interest rates Amount unlike steady retail deposits. However, with a gradual CASA build-up to | 78263 crore 36%, the bank has consistently managed its NIM well. Factoring in | 1364 crore positives from incremental CASA and rising proportion of high yielding...

Asset Quality improved sharply as GNPA contracted by 55bps QoQ to 0.97% and NNPA also contracted by 42bps to 0.39% in 1QFY18 as the bank recovered ~60% from one account classified as NPA in 4QFY17 in-line with the guidance (the balance amount is expected in due course). There...

Net Profit of Rs.965.5 Crores in Q1FY18; y-o-y growth of 31.9%, Net Interest Income of Rs.1,808.9 Crores for Q1FY18; y-o-y growth of 44.0% driven by growth in Advances & CASA, and steady expansion in NIM, NIM expanded to 3.7% for Q1FY18 from 3.6% in Q4FY17, NonInterest Income of Rs.1,132.2 Crores for Q1FY18; y-o-y growth of 17.8%, Total Net Income of Rs.2,941.1 Crores in Q1FY18 y-o-y growth of 32.7%, Operating Profit of Rs.1,704.2 Crores for...

YES surprised with outsized loan slippages though a significant chunk, ~46% (Rs9,110 mn) was contributed by a single account, which the bank expects to recover in FY18E. The profit beat was welcome given the higher provisions YES incurred in Q4FY17. The...

Asset Quality declined sharply as GNPA increased by 67bps QoQ to 1.52% and NNPA remained increased by 52bps to 0.81% in 4QFY17. The bank had to recognize one large account in cement sector worth INR 9.1bn as NPA based on the RBI audit which pushed the credit cost higher to 19bps for the quarter as against 8bps in 3QFY17. However, the bank expects to recover the same in 1HFY18. The bank sold assets (3 accounts) worth INR 8.7bn (INR 7bn received as SR) to ARCs...

NII increased to Rs. 1639.7 Cr in Q4FY17 compared to Rs. 1507.5 Cr in Q3FY17.

ICICI Securities Ltd | Retail Equity Research Absolute GNPA doubled QoQ at | 2018 crore, with net accretion of | 1013 crore in Q4FY17, attributable to reclassification of one cement account with exposure of | 911.5 crore, in conformity with divergences observed by RBI as per its compliance process. Consequently, the GNPA ratio increased 67 bps QoQ to 1.52%. Stressed assets, excluding GNPA, increased 52 bps QoQ to 1.42% Profitability growth continued to remain healthy at 30.2% YoY to...

YES Bank continues to deliver healthy performance on core operating front. However, near term headwinds clearly suggest underperformance compared to its peers. We believe that the Bank will continue to witness elevated level of credit cost, which will keep its earning profile and return ratio subdued over next 3-6 quarters. Rolling over our estimates to FY19E, we reiterate our HOLD recommendation on the stock with an upwardly revised Target Price of Rs1,483...