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EARNINGS REVIEW
Yes Bank (YESB.BO)
Buy Equity Research
Above expectations on lower provisions, maintain Buy
Moderating growth to protect margins
Yes Bank (YESB) reported 1QFY12 net profit of Rs2.2 bn (+6% qoq, +38% yoy),
8% above GSe and 6% ahead of Bloomberg consensus. Key highlights: 1) NII
came in at Rs3.54 bn (+2% qoq, +35% yoy) , 7% below GSe as advances
growth came in lower at 26% yoy (13 pp lower than GSe—YESB ran down low
yielding portion of the book) but margins remained stable (NIM at 2.8%, flat
qoq) despite cost of funds growing 70 bp qoq, 2) Non interest income came at
Rs1.65 bn, (+15% yoy) as higher financial advisory income was offset by lower
financial markets/ transaction banking; (3) Costs came in 9% below our
estimate (+24% yoy) despite expansion of branches (41 branches added in
Q1FY12), on better cost control; (4) PAT beat was achieved as Yes Bank
booked only Rs15 mn in provisions vs our estimate of Rs381 mn on the back
of a Rs150 mn write-back this quarter (5) Asset quality improved significantly:
Gross NPL declined 31% qoq to Rs0.6 bn (0.2% of loans), while net NPLs
declined 71% qoq to Rs27 mn.
Remains a GARP idea; reiterate Buy
We fine-tune our FY12E-FY14E EPS by -3% to +1% on the back of the
results. We raise our 12-m CAMELOT-based TP to Rs380 (from Rs 370) as
we roll forward our target BVPS to June-2012. We reiterate Buy as we
believe YESB will deliver around 25% CAGR between FY12E- FY14E, vs
which the stock trades at reasonable valuations of 11.8X FY12E EPS. Key
risks: Higher exposure to infrastructure, higher than expected NPLs,
frequent capital raising.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
EARNINGS REVIEW
Yes Bank (YESB.BO)
Buy Equity Research
Above expectations on lower provisions, maintain Buy
Moderating growth to protect margins
Yes Bank (YESB) reported 1QFY12 net profit of Rs2.2 bn (+6% qoq, +38% yoy),
8% above GSe and 6% ahead of Bloomberg consensus. Key highlights: 1) NII
came in at Rs3.54 bn (+2% qoq, +35% yoy) , 7% below GSe as advances
growth came in lower at 26% yoy (13 pp lower than GSe—YESB ran down low
yielding portion of the book) but margins remained stable (NIM at 2.8%, flat
qoq) despite cost of funds growing 70 bp qoq, 2) Non interest income came at
Rs1.65 bn, (+15% yoy) as higher financial advisory income was offset by lower
financial markets/ transaction banking; (3) Costs came in 9% below our
estimate (+24% yoy) despite expansion of branches (41 branches added in
Q1FY12), on better cost control; (4) PAT beat was achieved as Yes Bank
booked only Rs15 mn in provisions vs our estimate of Rs381 mn on the back
of a Rs150 mn write-back this quarter (5) Asset quality improved significantly:
Gross NPL declined 31% qoq to Rs0.6 bn (0.2% of loans), while net NPLs
declined 71% qoq to Rs27 mn.
Remains a GARP idea; reiterate Buy
We fine-tune our FY12E-FY14E EPS by -3% to +1% on the back of the
results. We raise our 12-m CAMELOT-based TP to Rs380 (from Rs 370) as
we roll forward our target BVPS to June-2012. We reiterate Buy as we
believe YESB will deliver around 25% CAGR between FY12E- FY14E, vs
which the stock trades at reasonable valuations of 11.8X FY12E EPS. Key
risks: Higher exposure to infrastructure, higher than expected NPLs,
frequent capital raising.
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