Hold Yes Bank; target of Rs 890: ICICIDirect

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

ICICIDirect's research report on Yes BankPAT grew 27% YoY to | 702 crore, above our estimate but asset quality deterioration was higher than previous trend (absolute GNA increase by | 190 crore QoQ to | 749 crore) though overall GNPA ratio seemed healthy at 0.76% of loans. Management indicated that RBI’s asset quality review (AQR) impact has been fully factored in NII jumped 27.1% YoY to | 1241 crore while other income led by corporate banking fees was up 36% YoY to | 803 crore. Credit traction stays strong at 30% YoY to | 98210 crore with the corporate book (65% of total) rising 31% YoY. Margins were steady QoQ at 3.4%. Restructured assets (RA) declined QoQ to | 524 crore (from | 568 crore in Q3FY16) forming ~0.53% of loans. In Q4, the bank sold an account of ~| 70 crore to ARC under the RA category. There was no asset under SDR or the 5:25 scheme. Credit cost in Q4 was at 16 bps. Full year credit cost at 50 bps while for FY17E guided at 50-70 bps. In the past five years, the bank consistently delivered 1.5%+ RoA and 18%+ RoE. This is estimated to be maintained in FY16-18E. Though asset quality has remained resilient, given the current business environment, probability of higher slippages cannot be completely ruled out. However, healthy asset growth coupled with improving margins would support earnings ahead. We expect the bank to clock healthy 24% CAGR in PAT to | 3920 crore in FY16-18E. We revise our target price higher to | 890 (| 750 earlier) as we roll over to FY18E ABV of | 458 and assign multiple of 1.9x. The stock has seen a strong rally recently. We maintain HOLD. 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.

Read More