The bank has reported net profit after tax of Rs 120.25 Crore in the latest quarter. Emkay has given a sell rating to Yes Bank NSE -3.67 % with a target price of Rs 9. The stock closed at Rs. 13.14 on BSE.
Emkay Research has given a ‘Sell’ rating to the bank given sub-par return ratios and unfavourable risk-reward with higher valuations. The brokerage has set a target price of ₹11 for the share of Yes Bank. At 12:06 p.m, on Wednesday, the share of Yes Bank is trading at ₹15.85 on NSE.
Here are the report highlights:
- Yes Bank has sustained profitability at ₹1.5bn (vs. estimate of ₹8.7bn loss), aided by treasury gains and contained provisions as NPA formation is deferred due to SC stay. Overall stress pool stood high at Rs185bn (11% of loans), indicating continued asset quality risk.
- The downtrend in credit/deposits has been largely arrested and incremental focus is on building retail asset/liabilities, but sustaining momentum will be an arduous task. Despite CET 1 of 13.1%, the bank plans to raise capital again to the tune of ₹100bn (4.2% of RWA) probably to secure capital before asset quality fallout begins, leading to further dilution for existing investors.
- Yes Bank carries Covid-related contingent provisions of Rs27bn (1.6% of loans), which is still low factoring in higher stress pool. The bank has restructured over Rs81bn of loans (4.8% of loans), which is highest in the industry till now. It awaits regulatory approval for Independent ARC to transfer and manage its stress assets.
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Yes Bank