Buy Yes Bank; target of Rs 1050: Emkay

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26 Aug, 2025 12:21

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Emkay's research report on Yes BankYes Banks’ (YES) earning were in-line with estimate at Rs7bn; higher than expected provisions were compensated by strong fees and led to in-line earnings. Yes came out of RBI’s asset quality review unscathed and maintained its strong asset quality performance Slippage ratio was stable qoq at 174bp and higher write-offs contained GNPLs. Restructured loans fell qoq to 53bp v/s 67bp in 3QFY16, partially on account sale to ARCs (~Rs700mn). Bank utilized contingent provisions of Rs430mn this quarter; however overall net stress loans of the bank including security receipts was contained at 1% as compared to 1.1% in 3QFY16. Stable NIMs (3.4%), strong fees (36% yoy), improvement in CASA ratio (150bp qoq) and investment for future growth (branch and employee expansion) were the key positives With low business market share and expanded reach, bank is better placed to capitalize on any growth opportunity Indian economy presents. We upgrade our earnings estimates by 7% each to factor better NIMs and strong asset quality performance for FY17/18E. Resultantly, we expect PPP and earnings CAGR of ~27% and 28% over FY16-18E. respectively. However, given the strong outperformance i.e. 36% v/s 7.5% for Nifty over the last three months, we change our rating to Accumulate from Buy. Risk: Prolonged slowdown in Indian economy may translate into lower loan growth and higher delinquency.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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