We retain ‘Sell’ on YES Bank amid persistent concerns over its asset quality, sub-par return ratios and unfavourable risk-reward ratio,” Emkay Global Financial Services said. “We expect the bank’s return on assets trajectory to remain sub-par at 0.3-0.7 per cent over FY23-24E against management expectation of 1-1.5 per cent. The provision also decreased by 82.10 per cent YoY and 0.70 per cent QoQ to Rs 375 crore. However, the figure increased by 7.7 per cent on a quarter-on-quarter (QoQ) basis. The operating profit of the lender declined 66.40 per cent YoY to Rs 731 crore during the quarter under review.
“We believe the bank needs to accelerate its provision cover instead of showing token profits,” Emkay Global Financial Services said while setting a target price at Rs 10.
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