Yes Bank remains one of our best bet in the sector, we recommend a BUY rating on the stock with the TP of Rs 424. IT is likely to be one the key beneficiaries of economic revival.
We anticipate strong asset growth going forward – advances to grow at 30% CAGR over the next 2 yrs. Progress on retail assets/liabilities of the bank is also happening at much faster pace.
Retail piece is likely to make the balance sheet and earnings of the bank more granular, stable and less volatile leading to improvement in the valuation multiples.
Build-up of retail liabilities would improve its CASA/fees/retail loans generation capacity in a big way. In addition to this, asset quality stress on bank’s book is relatively less as compared to peer banks as reflected in Q3FY18 results.
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Higher growth than the industry, de-risking the balance-sheet with more build-up of retail assets/liabilities, relatively less asset quality stress, considering all these positives, we believe the bank is likely to trade at higher multiples. BUY with the TP of Rs 424, upside of 30%.
What started as one of India’s first securities brokerage houses in 1948 is today one of the country’s largest multi dimensional financial services group. LKP Securities is a Non Banking Finance Company (NBFC) registered with Reserve Bank of India & a listed public limited company having a networth of Rs.142 crores as on FY10. They are India's first financial group to be awarded the prestigious ISO 9002 certified KPMG Quality Registrar, USA, for certain businesses.
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