Yes Bank Catching Up With Private Peers 

Yes Bank Ltd. is catching up with private peers on valuations. The bank has a higher one-year forward price-to-book of 3.5 times as compared to Axis Bank Ltd. (2.2 times) and ICICI Bank Ltd. (1.7 times).

It is narrowing the gap with other retail lending-oriented banks, especially HDFC Bank, which has been a consistent performer.

Yes Bank’s one-year forward price-to-book is at a 15 percent discount to HDFC Bank’s, down from nearly 26 percent in the previous quarter.

The stock has been the best performer on Bank Nifty, up 27 percent year-to-date compared to a 13.6 percent rise in the bank Nifty Index.

Further Legs To Rally?

A report from broking house India Infoline Institutional Equities says the gap between Yes Bank's valuations with HDFC Bank and other retail-oriented lenders is likely to narrow further, aided by sharper improvement in CASA deposit and higher earnings growth. This combined with potential issuance of new equity will push the stock higher, the report said.

75 percent of the analysts polled by Bloomberg have a buy rating on the stock.