YES Bank share price target: ICICI Sec sees 17% downside, shares key risks

Despite a strong Q4 results, ICICI Securities suggested a target price of Rs 16 on YES Bank, suggesting a 17 per cent downside over the prevailing market price. On Monday, the stock climbed 7.07 per cent to hit a high of Rs 19.37 apiece.  

In its review note, ICICI Securities said YES Bank's reported Q4FY25 PAT of Rs 740 crore was a 5 per cent beat, led by NIM uptick, seasonal rise in fee and contained opex and improved asset quality. It said YES Bank's return on asset (RoA) inched up further to 0.7 per cent in Q4 from 0.6 per cent in Q3, with low-yielding RIDF investments reducing to 8.7 per cent of assets against 11 per cent YoY. 

ICICI Securities anticipated a NIM expansion over FY25–27 as it factored in further normalisation in RIDF and recent cut in saving account rates. 

"Gross slippages moderated to 2 per cent annualised while net carrying value of SR now stands at ‘nil’. We appreciate YES’ improving operating performance and see RoA rising from 0.6 per cent in FY25 to 0.9 per cent in FY26E and hitting the 1 per cent-mark in FY27E, benefitting from NIM expansion and muted credit costs," ICICI Securities said.

YES Bank's CASA growth, despite industrywide headwinds, remained strong at 6 per cent QoQ and 18 per cent YoY. The bank is targeting 12–15 per cent YoY growth in overall advances for FY26. ICICI Securities estimated FY26 growth at the lower end of the guidance.

This brokerage values the YES Bank stock at 0.9x estimated FY27 adjusted book value against 0.8x earlier and suggested a revised target of Rs 16 from Rs 15 earlier.

Expecting a limited downside ahead, ICICI Securities upgraded its rating op YES Bank to 'Reduce' from 'Sell'.  Faster-than-expected ramp-up in organic PSL and higher-than-expected NPA recoveries are key risks for YES Bank, the bank said.

"We estimate gross/net slippages at 2 per cent/1 per cent for FY26. Due to healthy current PCR (80 oer cent) and redemption from its SR book, credit costs are likely to remain comfortable, yielding faster conversion of operating earnings to bottom-line. We estimate RoA to rise from 0.6 per cent in FY25 to ~0.9 per cent/1 per cent for FY26/FY27," the brokerage said.