Sell YES Bank, target price Rs 10: Emkay Global

Emkay Global has sell call on with a target price of Rs 10. The current market price of YES Bank Ltd. is Rs 13.13. Time period given by analyst is one year when YES Bank Ltd. price can reach defined target.

YES Bank Ltd., incorporated in the year 2003, is a banking company (having a market cap of Rs 33323.02 Crore).

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 5610.71 Crore, up 16.05 % from last quarter Total Income of Rs 4834.93 Crore and down -8.36 % from last year same quarter Total Income of Rs 6122.62 Crore. The bank reported net profit after tax of Rs 203.76 Crore in latest quarter.

Investment Rationale
The brokerage expects the bank’s RoA trajectory to remain sub-par at 0.5-0.8% over FY23-24E vs. management expectation of 1-1.5%. It retains Sell with a TP of Rs10 (0.9x Sep’23E ABV) amid persistent concerns over its asset quality, sub-par return ratios, and unfavorable risk-reward ratio with higher valuations. Although the current management with regulatory/investor support has been able to avert bank failure, we believe that reorienting Yes Bank to a sustainable retail bank will require differentiated private banking management. Key risks to the call: Faster-than-anticipated business scale up and lower-than-expected NPA formation.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2021, while FIIs held 10.5 per cent, DIIs 47.1 per cent and public and others 42.5 per cent.