Laborers clean windows near signage for Yes Bank Ltd. at the Indiabulls Real Estate Ltd. Finance Centre in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

Brokerages Back Yes Bank Despite Mixed Third Quarter Performance

Brokerages maintained their stance on Rana Kapoor-led Yes Bank Ltd. after the private lender’s net profit for the December quarter matched analyst estimates with a marginal improvement in its asset quality.

Yes Bank’s net profit rose 22 percent year-on-year to Rs 1,077 crore, according to its exchange filing. Analysts tracked by Bloomberg had estimated the bottom line at Rs 1,062 crore.

Here’s what the brokerages had to say on Yes Bank’s quarterly results:

Citi On Yes Bank

  • Maintained ‘Buy’ with target price of Rs 400, an upside of 17.3 percent from current levels.
  • Strong growth, but margin and asset quality miss.
  • CASA and fee momentum continue with gains in retail lending franchise.
  • Slippages and credit costs remained relatively elevated.

Morgan Stanley On Yes Bank

  • Maintained ‘Overweight’ with target price of Rs 450, an upside of 32 percent.
  • Earnings in the December quarter missed, driven by lower-than-expected net interest income and higher provisions, partially offset by higher non-interest income.

Motilal Oswal

  • Maintained ‘Buy’ with target price increased to Rs 410 from Rs 382, an upside of 21 percent.
  • Likely to maintain industry-leading growth.
  • Improvement in asset quality and consistency in operating metrics critical for re-rating of the stock.
  • Earnings to growth at a compounded annual growth rate of 30 percent till March 2021.