YES Bank share price targets: What Nomura, 2 others say on buy, hold and sell

YES Bank: Three brokerages suggested share price targets for YES Bank Ltd in the Rs 20-24 range and maintained neutral-to-negative stance, citing high valuations and gradual recovery in retail segment. Foreign brokerage Nomura suggested a ‘Neutral’ rating on YES Bank with a target price of Rs 22, saying return on assets (RoA) expansion was on track but a retail turnaround remained key.

Emkay Global suggested a ‘Sell’ rating on YES Bank, citing sub-par growth, a weak returns profile, and higher valuations. The brokerage said it remained watchful of any potential management change and a resultant medium- to long-term turnaround strategy, and assigned a target price of Rs 20 to the stock.

ICICI Securities maintained its ‘Hold’ rating on YES Bank and revised its target price to Rs 24 from Rs 22 earlier.

YES Bank Ltd reported a 55 per cent year-on-year (YoY) jump in net profit at Rs 951.6 crore compared with Rs 612.30 crore in the same quarter last year. While YES Bank’s returns profile is on a gradually improving trajectory, the management’s target of industry-level growth in FY27 is ambitious, Nomura said.

"We revise our earnings estimates for FY26-27F upwards due to strong SR recoveries, but lower FY28F earnings by 8 per cent to reflect only a gradual turnaround for the retail segment. Moreover, current valuation at 1.2x Dec-27F BVPS adequately captures the positives, in our view. We maintain our Neutral rating with a new target price of Rs 22 against Rs 18 previously), valuing the bank at 1.1 times Dec-27F BVPS," Nomura said.

Emkay Global said YES Bank's gross slippages moderated in Q3, still stayed elevated at 1.7 per cent of loans, primarily due to stress in retail segments like MFI and small/micro enterprises. It said higher write-offs and steady recoveries helped stabilise the gross non-performing asset ratio at 1.5 per cent.

The management pointed to slippages in PL/cards having eased, with credit card early-bucket stress flow rates declining from 20 per cent to 12 per cent, and the overall retail asset stress flow rates falling to 8.7 per cent, indicating broad-based improvement in retail asset quality, including unsecured products.

"However, we believe the retail portfolio may undergo one more round of clean-up under the new management, and thus keep gross credit cost at elevated levels, without taking into account the recovery from ARC," Emkay said.

For the quarter, loan growth remained muted at 5 per cent YoY, but CASA growth remained superior, ICICI Securties said.

"Despite adverse spreads, NIM improved 12 bps QoQ to 2.6 per cent, led by decline in RIDF (down to 7 per cent of assets). While retail slippages have eased, at 3.4 per cent levels, it remains elevated. RoA jumped to a multi-quarter high of 0.9 per cent," it noted.