Motilal Oswal's research report on Yes Bank
2QFY19 PAT declined 4% YoY to INR9.6b on account of elevated provisions/MTM losses. PPoP increased 24% YoY to INR23.7b (4% miss). Based on 1HFY19 PAT of INR22.3b, we estimate YES to deliver 2HFY19 PAT of INR24.0b – implying residual growth of 6.5%. NII grew 28% YoY, led by strong loan growth (61% YoY) and stable margins of 3.3%. YES has INR1.8b of unamortized MTM losses to be recognized in FY19.
Outlook
We lower our FY19/20E earnings by 11%/9% and estimate FY19/20 RoE of 16.7%/17.9%. Maintain Buy with a revised TP of INR270 (from INR350), based on 1.8xBV, which is at a 20% discount to three-year average multiple.
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