Thursday, January 21, 2010

Yes Bank Results inline with estimates ; REDUCE ; Target: Rs 200

Yes Bank

Results inline with estimates


REDUCE

 

CMP: Rs 278                             Target Price: Rs 200


Yes Bank's Q3FY10 results were inline with our expectations with NII growth of 75.2% yoy (Rs2.0bn) and net profit growth of 19.0%yoy (Rs1.3bn). The NII growth was driven by 71.1% yoy growth in advances (14.8% qoq) and 30bps expansion in margins to 3.0% as expected. However, the operating income grew by a moderate 17.2%, led by very high trading gains in Q3FY09 and a sharp 56.5% decline in wealth management revenues.

The bank asset quality remained stable during the quarter as the gross and net NPA stood at 0.30% and 0.1%. However the provision cover has declined sequentially by 478bps to 70.1% during the quarter.

Yes Bank has announced a QIP of USD150mn which we have already factored in our numbers. The stock is currently quoting at 3.4x FY10E and 2.8x FY11E ABV which we do not find attractive. We maintain our REDUCE rating on the stock with price target of Rs200.

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