Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L e a n f i r s t q u a r t e r , l o n g - t e r m s t o r y i n t a c t …
Yes Bank reported a PAT of | 216 crore, slightly below our estimate of |
232 crore. This was primarily due to lower-than-expected NII growth as
business de-grew 4.5% QoQ to | 76680 crore and other income was
subdued at | 1653 crore. However, pressure on the bottomline eased as
provisions came in at a mere | 1.5 crore due to a write-back of |15 crore.
Positives include NIM maintained at 2.8% for the past three quarters with
CASA growing 50% YoY (CASA ratio at 10.9%). Asset quality was best in
class as NNPA declined 20 bps QoQ to 0.01% with PCR at 95%.
Moreover, the bank is on track with its version 2.0 to strengthen its retail
presence with retail share increasing from ~5% in Q1FY11 to ~12% in
Q1FY12. We expect the bank to deliver on its strategy and estimate 40%
CAGR in business with profits growing by 39% CAGR over FY11-13E.
ƒ Version 2.0 intact: bank in investment mode…
The bank has added ~75 branches in the last two quarters taking
the total to 255 branches and plans to add 30-35 branches each
quarter in line with its strategy to improve its retail presence. It aims
to increase its employee strength from 4,385 in Q1FY12 to 5,400 by
the end of FY12. We estimate the cost to income ratio will stay
elevated at 37%, which is still better than industry range of 40-45%.
ƒ Well positioned to improve NIM ahead
NIM was maintained at 2.8% despite lower CASA and 70 bps QoQ
jump in CoF. The bank was able to pass on rising costs with YoA
increasing 90 bps QoQ as ~65% of the loan book is floating and the
tenor of the remaining loan book is less than a year. Moreover, with
the bank targeting a higher retail proportion, we expect CASA to
reach 12.5% by FY12E and increased retail loan book to result in
greater pricing power. This, we believe, would lead to NIM
improving in the medium term.
V a l u a t i o n
The long-term story for the bank remains intact with the bank focusing on
retail expansion, which will boost NIM. The bank has delivered RoA and
RoE of over 1.5% and 20%, respectively, for the past 11 quarters. Hence,
we maintain our target multiple for the bank at 2.2x FY13E ABV and value
the bank at | 398.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L e a n f i r s t q u a r t e r , l o n g - t e r m s t o r y i n t a c t …
Yes Bank reported a PAT of | 216 crore, slightly below our estimate of |
232 crore. This was primarily due to lower-than-expected NII growth as
business de-grew 4.5% QoQ to | 76680 crore and other income was
subdued at | 1653 crore. However, pressure on the bottomline eased as
provisions came in at a mere | 1.5 crore due to a write-back of |15 crore.
Positives include NIM maintained at 2.8% for the past three quarters with
CASA growing 50% YoY (CASA ratio at 10.9%). Asset quality was best in
class as NNPA declined 20 bps QoQ to 0.01% with PCR at 95%.
Moreover, the bank is on track with its version 2.0 to strengthen its retail
presence with retail share increasing from ~5% in Q1FY11 to ~12% in
Q1FY12. We expect the bank to deliver on its strategy and estimate 40%
CAGR in business with profits growing by 39% CAGR over FY11-13E.
ƒ Version 2.0 intact: bank in investment mode…
The bank has added ~75 branches in the last two quarters taking
the total to 255 branches and plans to add 30-35 branches each
quarter in line with its strategy to improve its retail presence. It aims
to increase its employee strength from 4,385 in Q1FY12 to 5,400 by
the end of FY12. We estimate the cost to income ratio will stay
elevated at 37%, which is still better than industry range of 40-45%.
ƒ Well positioned to improve NIM ahead
NIM was maintained at 2.8% despite lower CASA and 70 bps QoQ
jump in CoF. The bank was able to pass on rising costs with YoA
increasing 90 bps QoQ as ~65% of the loan book is floating and the
tenor of the remaining loan book is less than a year. Moreover, with
the bank targeting a higher retail proportion, we expect CASA to
reach 12.5% by FY12E and increased retail loan book to result in
greater pricing power. This, we believe, would lead to NIM
improving in the medium term.
V a l u a t i o n
The long-term story for the bank remains intact with the bank focusing on
retail expansion, which will boost NIM. The bank has delivered RoA and
RoE of over 1.5% and 20%, respectively, for the past 11 quarters. Hence,
we maintain our target multiple for the bank at 2.2x FY13E ABV and value
the bank at | 398.
No comments:
Post a Comment