IIFL raises target price on YES Bank by 30%
Mumbai: IIFL Institutional Equities has raised target price on YES Bank by 30% to Rs 1,690 citing high visibility on earnings growth.
"Issuance of new equity capital will likely provide a fillip to earnings growth, driven by a strengthening deposit franchise, sustained market share gains in corporate banking, and diversification of revenues," said IIFL in a note to clients today. The brokerage has a buy rating on the stock.
IIFL said the valuation discount between YES Bank and retail lending-oriented banks is likely to narrow, aided by delivery of consistent and high earnings growth.
"Adjusted for potential issuance of new equity, YES trades at an average discount of 26% to the peer group. We expect the discount to narrow gradually with sharper improvement in CASA deposit franchise and stable profitability metrics," said IIFL.
Shares of YES Bank were up 0.6% at Rs 1,432.95 in afternoon trade on the BSE.
IIFL said YES Bank is likely to deliver 27% EPS compounded annual growth rate over FY16 to FY19, driven by strong balance sheet growth, expanding margins, stable credit costs and increasing contribution from non-funded income.
"Issuance of new equity capital will likely provide a fillip to earnings growth, driven by a strengthening deposit franchise, sustained market share gains in corporate banking, and diversification of revenues," said IIFL in a note to clients today. The brokerage has a buy rating on the stock.
IIFL said the valuation discount between YES Bank and retail lending-oriented banks is likely to narrow, aided by delivery of consistent and high earnings growth.
"Adjusted for potential issuance of new equity, YES trades at an average discount of 26% to the peer group. We expect the discount to narrow gradually with sharper improvement in CASA deposit franchise and stable profitability metrics," said IIFL.
Shares of YES Bank were up 0.6% at Rs 1,432.95 in afternoon trade on the BSE.
IIFL said YES Bank is likely to deliver 27% EPS compounded annual growth rate over FY16 to FY19, driven by strong balance sheet growth, expanding margins, stable credit costs and increasing contribution from non-funded income.
