YES Bank shares: Ventura sees 42% upside ahead of Q3 results; check date, preview & more

Ventura Securities has initiated coverage on YES Bank Ltd, examining its transformation and highlighting that while growth was never a constraint in its formative years, risk management became a central concern following episodes of aggressive corporate lending. This resulted in significant asset quality issues, culminating in the financial crisis during FY19–20 and necessitating a strategic overhaul of the bank’s operations and balance sheet.

The restructuring led to a contraction, with advances falling to Rs 1,71,443 crore and deposits to Rs 1,05,364 crore in FY20. Ventura Securities describes this as a clean-up rather than franchise erosion, with SBI's capital support stabilising the institution and restoring depositor confidence.

The post-reconstruction shift towards retail and SME segments enabled a strong recovery, with advances and deposits rising to Rs 2,46,189 crore and Rs 2,84,525 crore, respectively, by FY25. SMBC’s strategic stake has further contributed to global credibility and enhanced governance standards at YES Bank.

Looking ahead, Ventura Securities projects YES Bank’s total advances will rise from Rs 2,46,188 crore in FY25 to Rs 3,37,991 crore by FY28, representing a compound annual growth rate of roughly 11 per cent. Retail and commercial advances are forecast to grow at a 14 per cent CAGR, raising their share of the loan book to 80per cent. 

Operationally, Ventura Securities anticipates improvements in profitability for YES Bank. The net interest margin is projected to expand by 20 basis points to 2.8 per cent by FY28. Net interest income is expected to increase to Rs 12,836 crore in FY28. Pre-provision operating profit is projected to rise to Rs 8,004 crore in FY28, supported by a reduction in the cost-to-income ratio from 71 per cent to 60 per cent.

Asset quality is expected to remain stable, with gross non-performing assets at 1.6 per cent and net non-performing assets at 0.3 per cent, while provision coverage ratio sustains at 79 per cent. Ventura Securities expects return on average assets to improve by 40 basis points to 1 per cent and return on average equity to rise by 400 basis points to 9.3 per cent. 

Ventura Securities underscores that YES Bank's focus on granular retail and SME lending, discipline in corporate advances, and enhanced governance, aided by SMBC’s involvement, are likely to underpin its transition towards sustainable growth in the coming years.

"Overall, YES Bank is no longer a turnaround story but an early-cycle compounding opportunity, where improving return ratios, restored stakeholder confidence and operating leverage form the core pillars of the investment thesis. We initiate coverage with a 'buy' rating and a price target of Rs 32.1 (1.7 times FY28E P/ABV)," Ventura adds.

The brokerage firm has cited interest rates increasing, can lead to a decrease in NIM and an increase in delinquencies will increase credit costs and compress profit margin as key risks for the lender.

The company board of YES Bank shall meet on Saturday, January 17, 2026 to consider and approve the standalone and consolidated financial results of the bank for the quarter and nine months ended on December 31, 2025. It will also host a concall for investors and analysts on the same day from 2.45 pm onwards.

In the December 2025 quarter, Kotak Institutional Equities is expecting YES Bank's net interest income (NIIs) to come in at Rs 2,425.4 crore, up 9 per cent UoU and 5 per cent QoQ. Pre-provisioning operating profit (PPOP) is penciled at 1,254 crore, up 16 per cent YoY but down 3 per cent QoQ. Net profit is seen at Rs 601.5 crore, down 2 per cent YoY and 6 per cent QoQ.

"YES Bank is a bit more cautious in select segments of the retail portfolio. Deposit growth is slower as well at 5 per cent YoY. We expect NIM at 2.9 per cent (flat to marginally positive QoQ) but there is likely to be a lot of volatility, given the nature of income booked when security receipts mature and impact of RIDF investments," said Kotak with a 'sell' rating and a target price of Rs 18.