Shares of Yes Bank fell 29 percent on April 30 after company reported weak set of numbers for the quarter ended March 2019.
The company has reported a net loss in the quarter ended March 2019 on the back of spike in bad loans. Analysts have mixed view on the stock and are expecting 5-10 percent fall in share prices on April 30.
On April 26, the company reported quarterly loss of Rs 1,507 crore as compared to Rs 1,179.44 crore in the quarter ended March 2018.
Net interest income, the difference between interest earned and interest expended, grew 16.3 percent year-on-year to Rs 2,506 crore with credit growth at 18.7 percent, but net interest margin contracted by 30 bps.
Macquarie: Downgrade to Underperform| Target: 165
Macquarie has double-downgraded Yes Bank stock to Underperform with a target price of Rs 165 which translates into a downside of 30 percent from current levels.
"We must eat humble pie today and admit we underestimated risks in structured finance. We got the call wrong. We draw upon our learnings from how Axis Bank handled its watchlist disclosures, and now built in a significantly more conservative slippage and credit cost estimate over FY20-22E, more than double the management’s guidance," Macquarie said in a note.
Over the past eight years we have been constructive on YES Bank’s ability to not just survive, but to thrive in a risky business segment like structured finance, the global investment bank said.
Macquarie slashed FY20-21E EPS by 45 percent each. "We have built in capital raise of Rs 35 billion at Rs 200/share in FY20."
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