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Last Updated : Jul 17, 2019 02:29 PM IST | Source: Moneycontrol.com

Yes Bank falls sharply from day's high ahead of June quarter earnings

The private sector lender is expected to see a sharp decline in Q1 profit on muted loan growth and weak asset quality.

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Yes Bank shares fell nearly 9 percent from day's high of Rs 108.40 intraday  on caution ahead of June quarter earnings set to be announced later today.

The stock rallied 4 percent in morning trade but wiped out those gains after initial hour of trade and touched an intraday low of Rs 99, falling nearly 5 percent from previous close. It was quoting at Rs 100.55, down Rs 3.35, or 3.22 percent on the BSE at 14:08 hours IST.

The private sector lender is expected to see a sharp decline in Q1 profit on muted loan growth and weak asset quality. Brokerages expect profit to fall by more than 80 percent YoY in June quarter.

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"Exposure stressed pool of around Rs 10,000 crore is expected to keep provisions higher at around Rs 1,208 crore (credit cost of 48 bps) compared to the earlier run rate that is expected to keep the pressure on earnings. Hence, PAT is expected to fall 85 percent YoY to Rs 188 crore," ICICI Direct said.

Prabhudas Lilladher also expects 84 percent decline in profitability. It said the bank could continue to face a challenging quarter due to rising NPAs.

"Most business metrics should slow down as capital remains at critical levels. Increase in stress ratios could add to the uncertainty of earnings," it added.

Pre-provision operating profit (PPoP) is expected to see a steep decline and net interest income growth could be in single-digit with pressure on margin in Q1.

Prabhudas Lilladher expects PPoP to fall 34 percent and Kotak sees the same declining 45 percent YoY.

Pressure on asset quality is expected to persist due to continuance in recognition of stressed assets, hence GNPA ratio is expected to increase around 67 bps to 3.89 percent, ICICI Direct said.

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First Published on Jul 17, 2019 02:26 pm
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