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Strong growth but rich on valuations |
REDUCE
CMP: Rs352 Target Price: Rs300
n Yes Bank’s Q2FY11 NII at Rs3.1bn and PAT at Rs1.8bn were better than our expectations driven by 15.6% qoq growth in advances and restricted pressure on NIMs
n Advances grew 15.6% qoq driven by sharp growth in the agriculture and infrastructure loans; deposits grew by 32% qoq, CASA witnessed some pressure with 40bps shrinkage
n Asset quality remained robust with gross NPAs at 0.2% of advances, negligible net NPAs and the provision cover of 75%
n Valuations unattractive at 3.2x FY11E/2.6x FY12E ABV. Maintain REDUCE with TP of Rs300 (2.2xFY12E ABV). Risks to our call – Equity raising and faster than expected growth
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