The company on Saturday reported a 16% YoY rise in net interest income to Rs 2,638 crore for the quarter under review. Net interest margin (NIM), meanwhile, gained 20 bps to 2.7%, while asset quality improved. Gross non-performing assets (NPA) ratio declined 30 bps YoY to 1.3% while net NPA ratio declined 10 bps to 0.2%.
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Yes Bank’s earnings have beaten estimates. The private lender was expected to report a 9-12% YoY rise in NII and a 4-44% YoY surge in net profit, according to estimates by several brokerages.
Morgan Stanley on Yes Bank
Despite the strong results, brokerages continued to remain cautious. Morgan Stanley remains ‘Underweight’ on the stock, with a target price of Rs 15 apiece, according to the brokerage note cited by ET Now. This implies a downside potential of nearly 26% from the stock’s previous closing price of Rs 20.19 apiece on NSE.
The international brokerage said that the company’s core operating performance was in line with estimates, while PAT missed expectations by 2% due to one-off provisions. It said the 45% growth in net profit was supported by higher net interest income, while the improvement in NIM was aided by deposit repricing and CASA growth.
Morgan Stanley added that the asset quality overall improved, although slippages were slightly higher on a sequential basis. It expects a gradual recovery in profitability. However, the international brokerage highlighted that the valuation remains expensive at 1.1x FY27 book as against sub-par return ratios. It said Yes Bank’s growth is still below industry levels, and the sustainability of the momentum will be a key monitorable.
JM Financial on Yes Bank
JM Financial, meanwhile, maintained its ‘Sell’ rating on the stock, but increased its target price to Rs 17 apiece from Rs 16 apiece. The latest target price implies a downside potential of nearly 16% from the stock’s previous closing price.
The domestic brokerage noted that the company’s strong PAT growth was led by a sharp rise in NII and lower-than-expected opex, more than offsetting higher provisions. “Management has guided for lower SR recoveries of INR8-10bn in FY27F, which may negatively weigh on its FY27 credit cost,” it noted.
Highlighting expensive valuations, JM Financial said, “A significant portion of the current earnings uplift is driven by SR recoveries, which are finite. With the recovery pool nearing exhaustion and core performance remaining weak, the sustainability of near-1% RoA continues to be uncertain. We believe the stock is discounting a structurally stronger profitability profile that is yet to be demonstrated without recovery-led support.”
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Yes Bank shares have gained over 8% in one week and nearly 10% in one month. The stock is, however, down more than 5% in 2026 so far.
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