Yes Bank - Downgrade to HOLD on back of macro headwinds - 1QFY14 Results Review - ANTIQUE

Yes bank reported net profits of INR 4bn during the quarter, marginally above consensus and our estimates of INR3.75bn on back of strong treasury profits. Resilient margins, benign asset quality ratios, strong traction in non-fund income and continued traction in saving deposit accretion and CASA ratio were key positives of the result. However given the macro uncertainties, we believe that credit growth for the bank may be constrained due to lack of liquidity. Therefore we are downgrading Yes Bank's earnings by 11% and 20% for FY14e and FY15e respectively to factor in slowing growth, low treasury profits and higher credit costs in context of deteriorating domestic macro. We also reduce our Target price from 558/share to INR 400/share (1.75x FY15e P/ABV) and downgrade the stock to Hold.

Source : Equity Bulls

Keywords