"In terms of valuation, the stock trades at a P/BV (x) of around 2.5x at estimated FY19 Book Value. We expect the bank to report decent earnings performance in FY19 as well," says Akash Jain, Vice-president, Equity Research at Ajcon Global Services.
Yes Bank has done well and delivered significant capital appreciation to its shareholders over last five years. However, we believe crème de la crème is over now and investors can expect max 30 percent upside from current market price.
The company delivered healthy results in Q3FY18. The total income of the bank during Q3FY18 stood at Rs 6,492.56 crore, amounting to a 24 percent growth of yearly basis.
Yes Bank registered a total income of Rs 5,229.96 crore last fiscal. This also amounts to a 7 percent quarterly growth over the total income of Rs 6,048.78 crore the bank posted during the July-September quarter of 2017-18. The bank witnessed net profit rise 22 percent year-on-year at Rs 1,076.7 crore during the third quarter of the current fiscal.
The private lender had registered net profit of Rs 882.63 crore during the corresponding period last financial year, it said in a stock exchange filing. Yes Bank registered 7 percent quarter-on-quarter growth in net profits, compared to the Rs 1002.73 crore the private sector bank made in the September quarter this fiscal, as per the filing. Its total income for the period under review came up to Rs 3,311.1 crore with a 32.1 percent growth on yearly basis.
Yes Bank's gross NPA was 1.72 percent in the Q3FY18 as compared to 0.85 per cent in the third quarter of the last fiscal. Net NPA was 0.93 percent in the quarter ending December 2017 compared to 0.29 percent in the similar period last year. Its net interest income stood at Rs 1,888.8 crore for third quarter of the fiscal, a growth of 26.8 percent on yearly basis.
"Yes Bank has delivered another quarter of satisfactory performance with sustained earnings delivery and accelerated growth momentum with the bank achieving a balance sheet size beyond Rs 2.5 lakh crore and advances book in excess of Rs 1.7 lakh crore," said Rana Kapoor, Managing Director and CEO of Yes Bank.
"On the digital front, the bank continues to reap benefits from its A.R.T. strategy proven through its leadership position in Merchant Payments for UPI with market share in excess of 75 percent," he further stated.
In terms of valuation, the stock trades at a P/BV (x) of around 2.5x at estimated FY19 Book Value. We expect the bank to report decent earnings performance in FY19 as well.Disclaimer: The author is Vice-president, Equity Research at Ajcon Global Services. The views and investment tips expressed by investment experts 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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.