say yes to "YES BANK".....

Yes bank’s Q3FY07 net income grew 73%yoy (17%qoq) to Rs251mn driven by strong top line

(up 84%yoy led by loan growth of 150%yoy and margin expansion of 10bps qoq to 3%), rising

fee income (up 50%yoy) and higher treasury gains. Key highlight of result was roll out of 7 new

branches (total 29 branches now) enhancing visibility on the growth trajectory. Yes bank

maintained its healthy asset quality with Net NPL being Nil.

expect earnings to grow at a CAGR of 66% driven by
a) strong loan growth (as Yes bank leverages the rising corporate credit demand and its expanding distribution network) supported by margin expansion of 10bps due to increasing share of low cost demand deposits

b) rising fees (driven by new product launches and growing retail franchise).


Yes bank, trading at 5x FY08E Adj book, could sustain its multiple one year out owing to
a) strong earnings growth trajectory (earnings estimated to grow at 66% CAGR),

b) rising ROE to >20% by FY09 (factoring in equity dilution of 20%)

c) its attractive positioning as a take over target

the scrip has a target of rs 190 in medium term