Yes Bank Ltd CMP: Rs 537 Target Price: Rs 646 Recommendation: BUY Results below expectations; outlook remains positive Yes Bank reported performance below expectations on account of lower Net Interest Income, lower other income and higher opex. PAT increased 9.6% YoY and 2.2% QoQ to Rs 440 cr. Asset quality was broadly stable during the quarter. We continue to remain positive on the bank owing to recent capital raising leading to healthy growth, control over asset quality, higher non interest income, sustainable cost to income ratio and comparatively higher return ratios. We believe that despite dilution in earnings; Yes Bank will be able to sustain RoE of 20%+ and RoA of 1.5% for FY15E. We expect PAT to witness CAGR growth of 21.1% over FY14-FY16E. At CMP, the stock is trading at a PE of 11.53x and 9.40x of FY15E and FY16E EPS and at an adjusted P/BV of 1.93x and 1.66x FY15E and FY16E Adj BV. We upgrade our rating from HOLD to BUY with a target price of Rs 646 (2.0x FY16E ABV); indicating an upside of 20.4% from current levels.
Posted on: Thu, 24 Jul 2014 06:32:55 +0000
Trending Topics
Recently Viewed Topics
© 2015