YES BANK MULTIBAGGER:
Yes Bank is a private bank in India. It was founded by Ashok Kapur and Rana Kapoor, with the duo holding a collective financial stake of 27.16% It was an 9 year old Yes Bank, one of the fastest growing mid-size private sector banks in India, the Bank having 430 branches at 275 locations and 951 ATMs of which, 74 branches and 345 ATMs were added in FY13 alone. The bank’s branches are concentrated more in North and West India.
The Bank having Employees over 7,000 personnel, in FY13, its balance sheet was close to the Rs. 1 lakh crore marks. By FY15, it aims to scale up its reach to 900 branches i.e. more than repetition in two years, and grow its balance sheet size to Rs. 1.5 lakh crore i.e. by 22% every year, over next two years. This looks achievable as bank’s balance sheet grew by 35% in FY13 and by 25% in FY12.
Since from 31st March 2013, the bank equity share capital stood at Rs. 358.62 crore, of which 25.72% was held by two promoter groups – 13.72%.
In the middle of the remaining shareholding, 49.03% stake is held by 367 FIIs, 13.22% by about 180 DIIs (including 4.74% held by LIC) and balance 12.11% by 1.4 lakh retail shareholders.
Yes bank has, year after year, proved consistency and growth in its financial performance and same was the case in FY13 with PAT rising 33% YoY to Rs. 1,301 crore from Rs. 977 crore in FY12. Total income also grew 33% to Rs. 9,551 crore from Rs. 7,164 crore in FY12, with net interest income jumping 37% YoY to Rs. 2,219 crore. This 30% plus growth rates are one of the highest in the industry.
Cost-to-income ratio stand at 38.4%, again very well-controlled as compared to industry norms, which float at 40%plus range. EPS for FY13 stood at Rs. 36.27, up 30% from Rs. 27.87 in FY12. Dividend payout (including dividend distribution tax) stood at 19%, with Rs.6 per share dividend paid for FY13.
Yes Bank’s CASA deposits have grown 72% YoY to Rs. 12,687 crore, with its increased focus on retail banking and maturing of older branches, thereby improving CASA ratio to 18.9%, from 15% twelve months ago. These have helped improve bank’s net interest margin (NIM) to 2.9% from 2.8% a year ago, although there is further room for improvement. Yes Bank aims to strengthen CASA further to 30% by FY15, which should help expand margins further.
For FY13, bank’s balance sheet size was just a tad below the Rs. 1 lakh crore marks, rising by a gigantic 35% to Rs. 99,104 crore, from Rs. 73,662 crore as of 31st March 2012. Its deposits and advances situate at Rs. 66,956 crore and Rs. 47,000 crore correspondingly, as per the latest balance sheet. This kind of destructive growth at relatively moderate base is quite praiseworthy.
The Bank has the most enviable asset quality in the industry, with just Rs. 7 crore net NPAs, accounting for barely 0.01% of net advances. This is a turn down from FY12’s Rs. 17.5 crore and 0.05% respectively. As of 31st March 2013, although gross NPAs rose to Rs. 94 crore from Rs. 84 crore YoY, in percentage terms, it fell marginally from 0.22% of gross advances to 0.20%.
Another feature in theYes Bank’s cap is that its return on average assets (RoA) has been very healthy at 1.5% for FY13 (again best-in-class) and has remained above the 1.5% mark since the last five years. Also, return on equity (RoE) of 20% plus has been maintained since the last 5 years, which stand at 24.8% in FY13.
Owing to a low CASA ratio, its NIMs are low. On the other hand, as CASA ratio improves going forward, the ratio is likely to strengthen. Yes Bank’s growth rate and asset quality is the best among peers.
BVPS, as on 31st March 2013, was Rs. 161.9, which discounts yesterday’s closing price of Rs. 456, by PBV multiple of 2.82x and PE multiple of 12.6x based on historic FY13 earnings. Presumptuous a conservative-to-realistic 20% PAT growth for FY13, bank is expected to report EPS of about Rs. 44 for FY14, with estimated BVPS of Rs. 205, as of 31st March 2014. This discounts the CMP by PE of 10.5x and PBV of 2.22x, on current year earnings.
To supplement its growth, Yes Bank plans to raise equity up to US $ 500 million in FY14, via GDRs / QIP or domestic institutional placement route, shareholder approval for which is already in place. The Bank has also received RBI approval in September 2012 to launch securities broking business.
We bet to grab share in range of Rs. 476-456 for Target of Rs. 575. In Time Period 9-12 Months
NSE SYMBOL: YESBANK
BSE ID: 532648
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