Yes Bank shares corrected 3 percent intraday on October 24, the Muhurat trading session, after the private sector lender disappointed investors with its quarterly earnings performance.
The stock was trading at Rs 15.80 per share, down 1.56 percent on the BSE at 6:21 pm IST, with 21.97 lakh volumes. Muhurat trading is a special one-hour trading session held by the bourses on the occasion of Diwali.
Yes Bank's standalone profit fell by 32 percent year-on-year to Rs 153 crore for the quarter ended September FY23 due to elevated provisions for bad loans.
Provisions and contingencies increased by 54 percent YoY to Rs 583 crore during the quarter and the sequential increase was 234 percent.
The bank has reported a 32 percent year-on-year increase in net interest income at Rs 1,991 crore for the quarter, with advances growing at a healthy pace of 3.2 percent QoQ (11.3 percent YoY) while deposits too maintained good momentum and increased by 3.5 percent QoQ (13.2 percent YoY).
"The asset reconstruction (ARC) transaction is expected to help reduce on-balance sheet stress and enable the bank to focus its management efforts on business growth," Nirmal Bang Institutional Research said. Yes Bank expects the deal to be completed by the end of November 2022.
On the operational front, the numbers were stable, with improvement in margin and healthy growth in non-interest income. Operating expenses remained elevated on the back of branch expansion and technology investments.
Net interest margin improved by 20 bps sequentially and 40 bps YoY to 2.6 percent for the quarter, while pre-provision operating profit increased by 16.6 percent YoY (up 34 percent QoQ) to Rs 790 crore during the quarter. Non-interest income has registered around 18 percent growth YoY as well as QoQ at Rs 920 crore in Q2FY23.
Nirmal Bang has maintained sell rating on the stock with a target price of Rs 14.8 per share.