Hold Yes Bank; target of Rs 350: Sharekhan
Sharekhan recommended hold rating on Yes Bank with a target price of Rs 350 in its research report dated October 26, 2017.
Sharekhan's research report on Yes Bank
Strong Operating performance: Yes Bank posted a strong Operating performance in Q2 FY18 boosted by strong business growth (up 28.7% YoY). Its net interest income (NII) grew by 33.5% YoY to Rs1885.1 crore driven by robust 34.9% YoY increase in advances and strong expansion 30 BPS YOY (flat sequentially) in net interest margin (NIM) which was at 3.70%. Buoyed by the balance sheet growth, the Non-interest income too showed strong growth traction and jumped by 35.4% YoY to Rs1248.4 crore. Healthy growth was witnessed in corporate banking fees (up 72.9% YoY) and retail banking fees (up by 29.8% YoY). However, the dampener was the rise in provisions (up 176.5% YoY, 56% QoQ) due to high gross slippages and divergence.
Outlook
Yes Bank stock is currently trading at ~2.7x FY19E BV which we believe is reasonable for the stock. Considering the weak asset quality outlook, we have downgraded our rating to “HOLD” with a revised PT of Rs 350 for the stock.
For all recommendations report, 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
