Yes Bank shares drop 4% after Q1 results. What are Nuvama, other brokerages saying?
Shares of Yes Bank declined 4% to Rs 22.70 on the BSE on Monday even after the private lender reported a standalone net profit of
Shares of Yes Bank declined 4% to Rs 22.70 on the BSE on Monday even after the private lender reported a standalone net profit of Rs 1,070.99 crore for the April-June quarter of FY27, a 34% year-on-year (YoY) rise from Rs 801.07 crore posted in the corresponding quarter of the previous financial year.Yes Bank on Saturday announced that its net interest income, which is the difference between interest earned and interest expenses, rose around 17.5% YoY to Rs 2,786,46 crore during the first quarter of the ongoing financial year, as against Rs 2,371.47 crore in the year-ago period.Yes Bank’s asset quality improved on a YoY basis, but non-performing assets rose sequentially. Its gross NPA stood at Rs 3,705 crore at the end of the quarter, lower than the Rs 4,022 crore reported in Q1 FY26 but higher than Rs 3,605 crore in Q4 FY26.
Net NPA also declined from the same period last year, but increased from the March quarter of FY26 to Rs 677 crore in the June quarter. Gross NPA ratio and net NPA ratio meanwhile stood at 1.3% and 0.2% respectively.Yes Bank’s provisions, however, jumped 39% YoY to Rs 394 crore during the quarter ended June 30, 2026. Debt-equity ratio stood at 0.66%, as against 0.69% in the year-ago period.Nuvama on Yes Bank share priceDespite higher credit growth, Yes Bank profit missed estimate by 6% mainly due to higher provisions on account of slower SR recoveries and staff cost, Nuvama said, adding that NIM was flat QoQ at 2.7%, but remains relatively soft.While headline asset quality was stable, SME witnessed uptick in slippages.
Going ahead, management expects growth to remain strong and has guided for 1% RoA in FY28, the brokerage noted. “We believe court judgement on AT1 bond issue (write-off of Rs 75bn) and any potential increase in stake by SMFG will be key monitorables,” Nuvama said.Given weak core profitability and valuations ahead of fundamentals, Nuvama maintained its ‘Reduce’ call on the shares of Yes Bank with a target price of Rs 22 per share. This implies a downside potential of nearly 7% from the stock’s previous closing price.JM Financial on Yes Bank share priceJM Financial said Yes Bank’s Q1 profit beat its estimate by 2%, primarily driven by improving core profitability and lower tax expenses, and partly offset by higher-than-expected provisions.
While management reiterated FY27F SR recovery guidance of Rs 8–10 bn (around Rs 15.6 bn in FY26), moderating recoveries may potentially weigh on FY27 credit costs, it said.“While core operating trends continue to improve, uncertainty around future SR recoveries remains a key factor to monitor,” the domestic brokerage said. It upgraded its rating on the shares of Yes Bank to ‘Reduce’ from ‘Sell’, with a target price of Rs 22 per share.
The BriefWire