Accumulate YES Bank; target of Rs 231: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on YES Bank

Yes Bank's earnings came in below expectations at Rs9.6bn (PLe: Rs13.5bn) on provisions from MTM on corporate bonds (from one large exposure) and higher slippages of Rs16.3bn). NII momentum of 28% YoY looks slower (but better sequentially) based on the fact that bank showed historic loan growth of +60% YoY. Asset quality deteriorated largely pertaining to one large exposure and other slippages, while has exposure of Rs26.2bn to IL&FS SPVs which is standard and has not done any provisions. We continue to re-iterate MD & CEO appointment remains key event for the bank's journey ahead and in near term capital efficiency has to be improved. Certain metrics have turned weaker like CASA mix, higher mix towards corporate (though retail increasing) and margins profile, which has to improve.

Outlook

We retain ACCUMULATE rating with revised TP of Rs231 (from Rs250) based on 1.5x Sep-20 ABV (from 1.7x Mar-20 ABV)

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