Yes Bank - Larger question hinges on interest rate regime - Emkay

Reco: HOLD
CMP: Rs 383
Target Price: Rs 460

- Yes Bank Q1FY14 NII at Rs6.6bn / PAT at Rs4bn, inline. NIM's at 3% were flat qoq. Steep increase in non-interest income used to up provisioning, now at 1% of loans

- Negative dollar gap coupled with recent RBI measures are key risks on NIM's. Precarious capital position warrants infusion, albeit valuations currently are not supportive

- Operational parameters viz building retail franchise, limited NPAs provides comfort. Larger question however hinges on interest rate regime

- Accordingly, lowered our NII est by 6% / 8% for FY14/FY15E. Not factoring in capital infusion as of now; asset growth will capped at 21% vs 25-30% in past. HOLD, TP of 460

Source : Equity Bulls

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