Accumulate Yes Bank; target of Rs 670: Emkay

Written By Unknown on Jumat, 25 Juli 2014 | 20.07

Brokerage house Emkay Global Financial Services is bullish on Yes Bank and has recommended accumulate rating on the stock with a target price of Rs 670 in its July 23, 2014 research report.

Emkay's research report on Yes Bank

>> Yes' Q1FY15 NII/PPOP at Rs7.5/6.4bn, 4/13% below consensus. Miss driven by slower (1) asset growth (9% yoy), (2) Rs400mn of swap losses & (3) non-recurring expenses

>> Asset quality remained stable GNPA/ NNPA at 0.3/0.1% of loans. Provision cover at 78.4% vs. 85% in FY14

>> Lower NII could be more than made up as (1) Rs30bn of QIP float can earn Rs900mn of income/quarter and (2) leveraging QIP money can bring back growth

>> With capital issues behind and relatively better RoA/ RoE, the stock should trade at 10-15% premium over Axis/ ICICI. Retain Accumulate with PT of Rs 670

"Yes Bank historically (last 10 years) has traded at an average premium of 10-20% over Axis and ICICI banks. However for quite some time it was trading at a discount of 5-15% over Axis bank and ICICI bank, as capital constraint impacted the growth premium. With capital position now comfortable, the risk to long term growth is no longer there. The bank carries tier I CAR of 12.6% now (including Q1FY15 profit adjusted). We retain our ACCUMULATE rating on the stock with price target of Rs 670", says Emkay Global Financial Services research.

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To read the full report click here


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