Dear All,
Forwarding you the Result Flash on Yes Bank for 4QFY2011 with an Accumulate recommendation and a Target Price of `351(12 months).
Yes Bank announced its 4QFY2011 results today, registering strong net profit growth of 45.2% yoy (6.4% qoq) Rs203cr, better than our estimate of Rs181cr mainly on account of higher other income and robust advances growth. Both Advances and Deposits grew by robust 54.8% yoy (10.5% qoq) and 71.4% yoy (16.4% qoq), respectively compared to industry advances growth of 21.4% yoy (4.7% qoq) and deposits growth of 15.8% yoy (5.0% qoq). CASA deposits increased by 68.6% yoy (17.6% qoq). However CASA ratio declined by 20bp yoy to 10.3%. Given the recent rise in interest rates and the bank’s wholesale-based funding mix, its cost of funds increased by 70bp qoq. Reported NIMs remained flat at 2.8% sequentially. Non-interest income grew at a moderate rate of 16.6% yoy. Operating profit increased by 35.4% yoy. The cost-to-income ratio during the quarter improved to 34.8% from 35.8% in 3QFY2011 and 36.3% in 4QFY2010. Asset quality of the bank improved with Net NPAs declining by 47.4% sequentially. Gross NPA and Net NPA ratio for the quarter came in at 0.23% and 0.03%, respectively. Provision coverage ratio (excluding technical write-offs) improved to 88.6% from 76.1% in 3QFY2011. The bank’s CAR stood at 16.5% with Tier- I CAR at 9.7%.
Currently the stock is trading at 2.1x FY2013E ABV. We maintain an Accumulate rating on the stock with a Target Price of Rs351.
| Exhibit 1: 4QFY2011 Actual vs. Estimates | |||
| (Rs cr) | Actual | Estimates | Var (%) |
| Net interest income | 349 | 329 | 6.1 |
| Non-interest income | 187 | 165 | 13.3 |
| Operating income | 535 | 493 | 8.5 |
| Operating expenses | 186 | 182 | 2.3 |
| Pre-prov. profit | 349 | 311 | 12.1 |
| Provisions & contingencies | 43 | 30 | 44.3 |
| PBT | 306 | 281 | 8.6 |
| Prov. for taxes | 102 | 100 | 1.9 |
| PAT | 203 | 181 | 12.3 |
Source: Company, Angel Research
Exhibit 2: 4QFY2011 Performance summary
| (Rs cr) | 4QFY2011 | 3QFY2011 | % chg (qoq) | 4QFY2010 | % chg (yoy) |
| Interest earned | 1,223 | 1,126 | 8.6 | 665 | 84.0 |
| Interest expenses | 874 | 803 | 8.9 | 420 | 107.9 |
| Net interest income | 349 | 323 | 7.8 | 244 | 42.7 |
| Non-interest income | 187 | 162 | 15.5 | 160 | 16.6 |
| Operating income | 535 | 485 | 10.4 | 404 | 32.4 |
| Operating expenses | 186 | 174 | 7.4 | 147 | 27.1 |
| Pre-prov. profit | 349 | 311 | 12.1 | 258 | 35.4 |
| Provisions & contingencies | 43 | 25 | 73.4 | 43 | 1.6 |
| PBT | 306 | 286 | 6.7 | 215 | 42.1 |
| Prov. for taxes | 102 | 95 | 7.3 | 75 | 36.2 |
| PAT | 203 |
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