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Home / Markets / Stock Markets /  Yes Bank shares surge post Q4 results. Should you buy, sell or hold?
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Shares of Yes Bank surged more than 5% on the BSE in Monday's opening deals after the bank on Saturday posted a Q4 net profit of 367 crore, as against a loss of 3,788 crore in March quarter of the previous financial year. 

Its gross non-performing assets (NPAs) as a percentage of total advances stood at 13.9% as on 31 March, down 150 basis points (bps) y-o-y and 80 bps lower than the previous quarter.

The bank's core net interest income came at 1,819 crore for the March quarter, which is a rise of 84% when compared to the year-ago period. The net interest margin expanded to 2.5%, while it recorded a loan growth of 8%.

Subdued return ratios of the bank, coupled with attractive valuations of large cap banks make it challenging to make a favourable case for Yes Bank currently, said analysts at Nirmal Bang. The brokerage has maintained its Sell rating on Yes Bank shares with a target price (TP) of 12.8.

“The bank has guided for (1) 3% exit quarter NIM in FY23 (2) 2.4% opex/assets (3) 2% slippages (4) >0.75% ROA in FY23. Our numbers are fairly lower than management’s guidance, but, we would closely watch quarterly delivery to make changes to our estimates," the brokerage note stated.

Meanwhile, the private sector lender plans to set up an asset reconstruction company is on track and it expects to transfer all its bad loans to the entity by end of June.

"We remain cognisant of risks from delay in resolution of stress pool, net labelled exposure of 5.3%, modest RoE profile during transition and supply overhang post the expiry of lock-in shares. We maintain Hold with an unchanged target price of 14," said ICICI Securities in a note on Yes Bank.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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