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Macquarie Research
YES Bank (Ourperformer)
CMP: ₹851.40
Target: ₹1,000
YES Bank 4Q15 profit numbers were in line with our estimates despite excess provisioning. Loan growth of 35 per cent+, customer assets growth of 25 per cent, stable margins, improving CASA per cent ratios despite strong overall balance sheet growth and stressed assets under 1 per cent of the loan book are all very good numbers, considering the tough economic circumstances. We do not view the capital raising as negative for YES Bank and will be supportive of any such raise and will encourage investors to participate in the offering. World over, banks are raising money to meet solvency requirements whereas YES Bank is requiring capital for growth, something which has been elusive not only for global banks but also for domestic banks in the recent past. 12-month price target based on a Gordon growth methodology. Catalyst: Strong growth and improving profitability.
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