Yes_Bank_260613
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Transcript of Yes_Bank_260613
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7/27/2019 Yes_Bank_260613
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Sector: Financials
Sector view: Positive
Sensex: 18,662
52Weekh/l(Rs): 547 / 322
Marketcap(Rscr): 16,089
6mAvgvol(000Nos): 2,354
Bloombergcode: YES IB
BSEcode: 532648
NSEcode:
YESBANK
FV(Rs): 10
Prices as on June 25, 2013
CompanyratinggridLow High
1 2 3 4 5
EarningsGrowth
RoAProgression
B/SStrength
Valuationappeal
Risk
Sharepricetrend
80
105
130
155
180
Jun12 Oct12 Feb13 Jun13
YesBank Sensex
Shareholdingpattern
20
40
60
80
100
Jun12 Sep12 Dec12 Mar13
Promoters Institutions Others
%
Rating: BUYTarget(13months): Rs510CMP: Rs448Upside: 13.8%ExitTrigger*: Rs421
June26,2013
Research Analyst:
RajivMehta
Express Idea
Yes Bank
*Exittriggeristhepricelevelbelowwhichinvestorshouldexitposition
Loan growth to improve
Yes Banks loan growth has pickedup over the past few quarters suggesting
improving willingness to lend visavis investing in credit substitutes. We see
thistrendcontinuing inthecurrentyearascreditcyclestabilizesand interest
ratesdecline.
We
estimate
loan
growth
improving
to
27%/32%
in
FY14/15.
Increasing granularity of deposits
Drivenbysubstantialnetworkexpansionandhighersavingsrateoffered,CASA
continuestogrowaheadofoveralldeposits.CASAratioimprovedby400bpsin
FY13andisestimatedtoimprovebysimilarextentinFY14andFY15supported
bycontinuedaggressivenetworkadditionand improvingmaturityofthenew
branches. Share of retail franchise (SA + Retail TDs) within deposits has
increasedto~26%,movinginlinewithbanksstrategyofaddinggranularity.
NIM to improve by 15-20bps through FY14
Near
term
and
longer
term
margin
outlook
is
positive
for
Yes
Bank.
While
substantialCASAexpansionandimprovingassetmixwouldbestructurallevers,
benignwholesaleratesandplannedcapitalraising(uptoUS$500mn)wouldbe
cyclical factors driving NIM improvement. We see strong scope of NIM
improvingby1520bpsthroughFY14and1015bpsthroughFY15.NIIgrowthis
estimatedtobe32%paonbalancesheetgrowthof24%paoverFY1315.
Operational metric being managed well
Robust revenue growth has enabled Yes Bank to absorb the impact of
substantial branch investments without diluting its operational metric. With
strong traction in noninterest income likely to continueandmaterial margin
expansionunderway,thecost/incomeratioisestimatedtobecontainedwithin
40%inFY14/15notwithstandingcontinuednetworkexpansion.
Superior RoAs and earnings growth delivery to continue
Assetqualityhasbehavedwellwithdiversified,granularandshorttermnature
of thecorporateandcommercialbanking book.Banksguidanceof5060bps
creditcostforFY14(includingscopeforcountercyclicalbuffer)andahighPCR
of93%allayanxietyinastressedmacro.Despitehigherprovisioning,wedonot
envisageanydilutioninbanksRoAandearningsgrowthdelivery.Further,the
bookvalueislikelytogetaboostfromtheimpendingcapitalraise.
FinancialsummaryY/e31Mar(Rsm) FY12 FY13E FY14E FY15ETotaloperatingincome 24,728 34,762 45,571 58,617
Yoygrowth(%) 32.2 40.6 31.1 28.6
Operatingprofit(preprovisions) 15,402 21,417 27,821 35,543
Netprofit 9,770 13,007 16,619 21,655
yoygrowth(%) 34.4 33.1 27.8 30.3
EPS(Rs) 27.7 36.3 40.7 53.0
Adj.BVPS(Rs) 132.0 161.8 235.1 278.4
P/E(x)
16.3
12.4
11.1
8.5
P/Adj.BV(x) 3.4 2.8 1.9 1.6
ROE(%) 23.1 24.8 21.5 20.5
ROA(%) 1.5 1.5 1.5 1.6
Source:Company,IndiaInfolineResearch
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AnExpress Idea isarecommendationbasedonourviewonthesectorand/orstockfromaneartomediumtermperspective,typicallylessthanthreemonths.Theviewcanbebasedonfundamentalsand/ortechnicalparametersforthestockand/orourviewonthesectoronthewhole.
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