Arihant Capital recommended accumulate rating on Yes Bank with a target price of Rs 255 in its research report dated January 24, 2019.
Arihant Capital's research report on Yes Bank
Yes Bank Q3FY19 performance was broadly mixed. Its profit for the quarter de-grew by 7% YoY at Rs. 1002 cr, impacted by lower non-interest income and accelerated provisioning made on account of IL&FS. Advances of the bank sharply jumped by 42% YoY at Rs. 243,885 cr, leading to higher NII growth of 41% to Rs. at 2,666 cr whereas margins for the quarter stood stable QoQ at 3.3%. Other income of the bank fell by 37.4% at Rs. 891 crpredominantly on account of loss in its treasury portfolio and lower corporate banking fees. OPEX for the the quarter grew by 20% YoY at Rs. 1567 cr, resulting into increase in its cost-income Ratio which is 44% vs 39.5% YoY. Operating profit for the quarter stood at Rs. 1990 cr, registering de-growth of 1% over corresponding quarter of previous year.
At CMP of Rs220, the stock is trading at P/ABV(x) of 1.5x its FY20E ABV. We have an ‘Accumulate’ rating on stock.
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