According to the research house, Yes Bank earnings are likely to be softer, but the quality is set to improve going ahead.
Yes Bank shares rallied nearly 4 percent in the morning trade on March 14 after global investment firm Deutsche Bank revised its price target for the stock upwards to Rs 300 from Rs 280 earlier.
The stock was quoting at Rs 252.90, up Rs 8.55, or 3.50 percent on the BSE, at 0942 hours IST.
While maintaining buy call on the stock, the brokerage said the tough phase for the bank is behind and it is moving towards stability.
According to the research house, earnings are likely to be softer, but the quality is set to improve going ahead.
“We expect corporate loan growth to slow down to 12-15 percent, but retail/SME Loan should grow at 40-50 percent. We expect overall loan book growth at 16-18 percent over FY20-21,” Deutsche said, adding net interest margin of the bank should hold up well, though fees income may slow down.
Last month, global rating agency Moody’s had changed its outlook on the company to stable from negative.
Initially this month, another global brokerage house CIMB had upgraded Yes Bank to add and also raised price target to Rs 300 (from Rs 230 earlier) as concerns abated on asset quality and the top management of the bank.
The global research house had said the nil divergence report of RBI and appointment of MD & CEO Ravneet Gill would result in a re-rating of the stock as valuations remain attractive at 1.5x FY20F P/BV.
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