Buy Yes Bank; target of Rs 350: Motilal Oswal

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Motilal Oswal's research report on Yes Bank

In continuation to our report dated 21st Sep’18 titled “RBI drives yet another management charge; overhang deepens - link”, Yes Bank hosted a conference call to discuss the recent developments and progress the bank is making to deal with the current situation. The stock has corrected by 38% since the RBI notification which allowed Mr. Rana Kapoor to continue as MD & CEO until Jan-19. Though the bank has applied for an extension of Mr. Rana Kapoor for three months until Apr’19 (further extension of six months requested for until Sep’19), the process of succession planning is already underway by the bank. Yes has established a “Search and Selection Committee” comprising of three existing Nomination & Remuneration Committee Board Members plus two external experts which will be finalized over next one week.

Outlook

While the near term uncertainty will remain till the new management takes charge and enunciates the business strategy, we believe that post sharp correction the stock is trading at reasonable valuations. We maintain our BUY rating with a TP of INR350.

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