private sector lender Yes BankStandalone Net Profit up 77% 266 crores for the third quarter as compared to 150.7 crore in the October-December quarter a year ago, as provisions were reduced significantly 374.6 crore from 2,089 crore.
Bank’s net interest income (NII) also fell by 31 percent 1,764 crore in Q3 as compared to 2,560 crore in the same quarter a year ago. Meanwhile, the gross non-performing assets (GNPA) ratio rose to 14.7% sequentially from 15% in the previous quarter.
Emkay maintains sell rating on Yes Bank shares with target price of Rs. Amid persistent concerns over its asset quality, sub-par return ratio and unfavorable risk-reward ratio.
“While the current management with regulatory/investor support has been able to avert the failure of the bank, we believe that replacing Yes Bank will be an uphill task. The bank’s CET 1 (~11.6%) also remains sub-par among competitors, and thus will require frequent dilution at lower valuations,” the note said.
The private lender has been on the latest slippage 978 crore while cash recovery of Rs. 610 cr and upgrade 573 crore, it said in its earnings filing.
“We remain wary of the increased NPA levels, which underlines our negative stance on Yes Bank. The bank is in the process of setting up an ARC, which will take over the substantial amount of NPAs currently lying in the bank’s books. ARC is expected to be fully operational by the end of June’22 (1QFY23). We wish to maintain that the outlook on the profitability front is weak,” Nirmal Bang said. It has maintained a sell rating on the stock with a target price of 12.5.
Another brokerage Anand Rathi has also placed a sell rating on Yes Bank stock with a price target. Operating performance as of 12 remained weak and near-term earnings are expected to be muted.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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