Hold Yes Bank; target of Rs 20: ICICI Securities

ICICI Securities research report on Yes Bank

Yes Bank (Yes) sustained an improving PPOP/ PAT trajectory in Q1FY26 with PAT up 8.5% QoQ at INR 8bn. RoA inched up to ~0.8%. NIM was flattish QoQ but revenue growth was led by strong treasury (INR 4.8bn; 0.5% of assets). RIDF drag continues to recede. Net NPA was stable QoQ at 0.3%, while PCR remains comfortable at ~80%. Slippages rose QoQ, though Yes pointed out the improving trends in unsecured PL and credit card stress. We concur with its guidance of 1% RoA for ‘exit FY26 and beyond’, driven by NIM revival and comfortable asset quality. SMBC has agreed to purchase ~20% stake in Yes at INR 21.5/ share.

Outlook

We believe SMBC transaction, if approved, offers healthy option value to existing shareholders and is a key monitorable. Upgrade to HOLD with a revised TP of INR 20.