Should you buy, sell or hold Yes Bank shares post Q3 results? What brokerages say
1 min read . Updated: 24 Jan 2022, 08:57 AM IST
Premium- Yes Bank's provisions came down significantly to ₹374.6 crore in Q3 from ₹2,089 crore in the year-ago quarter
Private sector lender Yes Bank's standalone net profit rose 77% to ₹266 crore for the third quarter as compared to ₹150.7 crore in the October-December quarter a year ago, as provisions came down significantly to ₹374.6 crore from ₹2,089 crore.
The bank's net interest income (NII) also slipped by 31% to ₹1,764 crore in Q3 as compared to ₹2,560 crore in the same quarter a year ago. Meanwhile, gross non-performing asset (GNPA) ratio improved sequentially to 14.7% from 15% in the previous quarter.
Those at Emkay retain Sell rating on Yes Bank shares with a target price of ₹10 amid persistent concerns over its asset quality, sub-par return ratios and unfavorable risk-reward ratio.
“Although current management with regulatory/investor support has been able to avert bank failure, we believe that turning around Yes Bank will be an arduous task. The bank’s CET 1 (~11.6%) too remains sub-par among peers, and thus would call for frequent dilution at lower valuations," the note stated.
The private lender's fresh slippages stood at ₹978 crore while there was cash recovery of ₹610 crore and upgrades of ₹573 crore, it said in its earnings filing.
"We remain wary of elevated NPA levels, which underpin our negative stance on Yes Bank. The bank is in the process of setting up an ARC, which will take over substantial amount of NPAs currently lying in the bank’s books. The ARC is expected to be fully operational by the end of June’22 (1QFY23). We continue to maintain that the outlook on the profitability front is weak," said Nirmal Bang. It has maintained Sell rating on the stock with a target price of ₹12.5.
Another brokerage Anand Rathi also has Sell rating on Yes Bank stock with price target of ₹12 as operating performance remained weak and near-term earning is expected to remain muted.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
