YES Bank shares fall 5% from day's high after Q1 results; Here's why
YES Bank reported a 10 per cent rise in the net profit on a year-on-year (YoY) basis at Rs 343 crore, which was Rs 314 crore in the year ago period.
- Jul 24, 2023,
- Updated Jul 24, 2023 11:57 AM IST
Shares of YES Bank gave up initial gains and fell during the early trading session Monday after the company reported a mixed bag of performance in the quarter ended on June 30, 2023. The stock rose 2 per cent during the early trade, but dropped about 5 per cent from the day's high. YES Bank reported a 10 per cent rise in the net profit on a year-on-year (YoY) basis at Rs 343 crore, which was Rs 314 crore in the year ago period. On a quarter-on-quarter (QoQ) basis, YES Bank reported over 69 per cent rise in net profit against Rs 202.43 crore net profit recorded in Q4FY23.
The net interest income (NIIs) for the private lender was up 8.1 per cent from a year ago and stood at Rs 1,999.6 crore. YES Bank's Gross NPA improved 20 basis points QoQ to 2.2 per cent in Q1FY24, while its net NPAs depleted 20 basis points (bps) to 1 per cent from 0.8 per cent in Q4FY23.
Following the announcement of earnings, shares of Yes Bank gained more than 2 per cent to Rs 18.44 on Monday, but the stock crashed about 5 per cent to Rs 17.53 as the session progressed. The lenders' total market capitalization stood over Rs 50,500 crore. The scrip had settled at Rs 18.06 on Friday. Provisions for the June 2023 quarter more than doubled YoY to Rs 360 crore. During the quarter, net interest margin (NIMs) saw a growth of 10 bps YoY to 2.5 per cent. Blaming the rising provisioning for dip in net profit, YES bank said that it has managed to report full-year profitability for the second straight year despite rising accelerated provisioning. "Yes Bank reported 10 per cent yoy earnings growth due to higher provisions, which offset 40 per cent yoy growth in operating profits. Slippages were marginally higher but higher write-offs kept headline NPL ratios marginally lower sequentially. Our investment thesis remains unchanged," said Kotak Institutional Equities. Normalization of return ratios is still some time away with the underlying drivers (NIM or cost ratios) yet to turn meaningfully positive. Valuations are no longer expensive but taking a constructive view needs more confidence on the path of RoE improvement, it added maintaining a 'reduce' rating but revised the target price to Rs 17 from Rs 16 earlier.
Shares of YES Bank gave up initial gains and fell during the early trading session Monday after the company reported a mixed bag of performance in the quarter ended on June 30, 2023. The stock rose 2 per cent during the early trade, but dropped about 5 per cent from the day's high. YES Bank reported a 10 per cent rise in the net profit on a year-on-year (YoY) basis at Rs 343 crore, which was Rs 314 crore in the year ago period. On a quarter-on-quarter (QoQ) basis, YES Bank reported over 69 per cent rise in net profit against Rs 202.43 crore net profit recorded in Q4FY23.
The net interest income (NIIs) for the private lender was up 8.1 per cent from a year ago and stood at Rs 1,999.6 crore. YES Bank's Gross NPA improved 20 basis points QoQ to 2.2 per cent in Q1FY24, while its net NPAs depleted 20 basis points (bps) to 1 per cent from 0.8 per cent in Q4FY23.
Following the announcement of earnings, shares of Yes Bank gained more than 2 per cent to Rs 18.44 on Monday, but the stock crashed about 5 per cent to Rs 17.53 as the session progressed. The lenders' total market capitalization stood over Rs 50,500 crore. The scrip had settled at Rs 18.06 on Friday. Provisions for the June 2023 quarter more than doubled YoY to Rs 360 crore. During the quarter, net interest margin (NIMs) saw a growth of 10 bps YoY to 2.5 per cent. Blaming the rising provisioning for dip in net profit, YES bank said that it has managed to report full-year profitability for the second straight year despite rising accelerated provisioning. "Yes Bank reported 10 per cent yoy earnings growth due to higher provisions, which offset 40 per cent yoy growth in operating profits. Slippages were marginally higher but higher write-offs kept headline NPL ratios marginally lower sequentially. Our investment thesis remains unchanged," said Kotak Institutional Equities. Normalization of return ratios is still some time away with the underlying drivers (NIM or cost ratios) yet to turn meaningfully positive. Valuations are no longer expensive but taking a constructive view needs more confidence on the path of RoE improvement, it added maintaining a 'reduce' rating but revised the target price to Rs 17 from Rs 16 earlier.