Buy Yes Bank; target of Rs 1840: Axis Direct

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Axis Direct's research report on Yes Bank
PAT at Rs 9.1 bn was in line with expectations, but GNPAs spiked up to 1.5% (almost 2x QoQ),led by slippage of a large cement sector asset, despite sales worth Rs 8.9 bn to ARCs. Management however expects this account to get resolved in Q1FY18. PCR came down significantly to 46.9% (down ~1900 bps QoQ), which to some extent is discomforting

Outlook

We roll forward our estimates to FY19, valuing YES at 2.9x FY19E P/ABV to arrive at a TP ofRs 1,840 (15% upside from CMP).At CMP, YES is trading at 3x/2.6x FY18E/FY19E ABV of Rs 538/Rs 626.

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