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Yes Bank (YESB.BO)
Buy Equity Research
In line with expectations; retain Buy
What surprised us
Yes Bank (YESB) reported 4QFY11 net profit of Rs2bn (+6% qoq, +45% yoy), in
line with GSe and 4% ahead of Bloomberg consensus. Key positives: 1) NII
was ahead of GSe at Rs3.49bn (+8% qoq, +43% yoy) on higher advances
(+55% yoy), and stable margins (NIM at 2.8%, flat qoq) 2) Non interest income
came at Rs1.87bn, (+17% yoy) on higher financial advisory income/transaction
banking; (3) costs came in 4% below our estimate (+27% yoy) despite branch
expansion (29 branches added in 4QFY11), on better cost controls; (4) Total
provisions came 62% ahead of GSe comprising of loan loss provision of
Rs0.4bn (0.5% of loans) resulting in PCR moving up to 88.6% (5) Gross NPL
rose 11% qoq to Rs0.8bn (0.2%), while net NPLs declined 47% qoq to Rs 92mn,
down 30% yoy at 0.03%.
What to do with the stock
We trimmed our FY12 EPS by 2% on slightly lower margin than our earlier
estimates on the downward adjustment of CASA ratio (13.9% from 16%), but
increased FY13E EPS by 4% to reflect the possible stabilization of interest rate
scenario. We retain our 12m CAMELOT-based TP at Rs370 per share and
reiterate our Buy rating. We believe YESB could deliver around 26% CAGR
between FY11 and FY13E, as the stock trades at reasonable valuations of
12.5X FY12. Key risks: Faster than expected growth leading to risk of higher
NPLs, rise of wholesale borrowing rates, frequent capital raising.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Yes Bank (YESB.BO)
Buy Equity Research
In line with expectations; retain Buy
What surprised us
Yes Bank (YESB) reported 4QFY11 net profit of Rs2bn (+6% qoq, +45% yoy), in
line with GSe and 4% ahead of Bloomberg consensus. Key positives: 1) NII
was ahead of GSe at Rs3.49bn (+8% qoq, +43% yoy) on higher advances
(+55% yoy), and stable margins (NIM at 2.8%, flat qoq) 2) Non interest income
came at Rs1.87bn, (+17% yoy) on higher financial advisory income/transaction
banking; (3) costs came in 4% below our estimate (+27% yoy) despite branch
expansion (29 branches added in 4QFY11), on better cost controls; (4) Total
provisions came 62% ahead of GSe comprising of loan loss provision of
Rs0.4bn (0.5% of loans) resulting in PCR moving up to 88.6% (5) Gross NPL
rose 11% qoq to Rs0.8bn (0.2%), while net NPLs declined 47% qoq to Rs 92mn,
down 30% yoy at 0.03%.
What to do with the stock
We trimmed our FY12 EPS by 2% on slightly lower margin than our earlier
estimates on the downward adjustment of CASA ratio (13.9% from 16%), but
increased FY13E EPS by 4% to reflect the possible stabilization of interest rate
scenario. We retain our 12m CAMELOT-based TP at Rs370 per share and
reiterate our Buy rating. We believe YESB could deliver around 26% CAGR
between FY11 and FY13E, as the stock trades at reasonable valuations of
12.5X FY12. Key risks: Faster than expected growth leading to risk of higher
NPLs, rise of wholesale borrowing rates, frequent capital raising.
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