YES Bank witnesses strong Q4FY15 with 28.07% upsurge in net profits; Buy for target of 920

1. 4
CMP 822.00
Target Price 920.00
ISIN: INE528G01019
JUNE 18th
, 2015
YES BANK LTD.
Result Update (PARENT BASIS): Q4 FY15
BUYBUYBUYBUY
Stock Data
Sector Banking
BSE Code 532648
Face Value 10.00
52wk. High / Low (Rs.) 910.00/502.20
Volume (2wk. Avg ) 346000
Market Cap ( Rs in mn ) 343382.28
Annual Estimated Results (A*: Actual / E*: Estimated)
Years FY15A FY16E FY17E
Interest Earned 115720.00 129027.80 141930.58
Total Income 136184.60 152562.09 168288.98
Net Profit 20053.60 21376.16 25247.69
EPS 48.00 54.11 60.44
P/E 17.12 15.19 13.60
Shareholding Pattern (%)
1 Year Comparative Graph
YES BANK LTD. BSE SENSEX
Highlights
YES BANK reported strong 4th quarter results with
Net Interest Income and Net Profit rising by
35.78% and 28.07% respectively.
Net interest Income, core income of the bank rose
from Rs. 7195.90 mn to Rs. 9770.70 mn in Q4
FY15.
Net Profit in Q4 FY15 Jumps to Rs. 5509.90 mn
from Rs. 4302.10 mn in corresponding quarter of
previous year.
Total Advances grew by 35.8% to Rs. 755498.00
mn as at March 31, 2015.
Non Interest Income increased by 32.5% y-o-y to
Rs. 5904.00 mn for Q4 FY15.
The Bank has recommended a final dividend @
90% i.e. Rs. 9.00/- per share on face value of Rs.
10.00/- each for the financial year 2015.
Yes Bank Ltd has approved the proposal to seek
final approval of Shareholders for increase in the
limit for the FII / FPI of upto 74% of the paid up
share capital of the Bank.
Current and Savings Account (CASA) deposits
grew by 29.0% y-o-y to Rs.210790.00 mn taking
the CASA ratio to 23.1% as at March 31, 2015.
Gross NPA as a proportion of Gross Advances was
at 0.41%, while Net NPA as a proportion of Net
advances was at 0.12% as at Mar 31, 2015.
Total Deposits grew by 22.9% to Rs.911758.00 mn
as at March 31, 2015.
The Bank’s Balance Sheet grew by 24.9% to Rs.
1361710.00 mn as at March 31, 2015.
YES BANK’s total branch and ATM network stands
at 630 branches and 1,190 ATMs as on March 31,
2015.
PEER GROUPS CMP MARKET CAP. EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
YES Bank Ltd. 822.00 343382.28 48.00 17.12 2.94 90.00
ICICI Bank Ltd. 303.05 1760471.20 19.25 15.75 2.40 300.00
Axis Bank Ltd. 549.65 1305373.40 30.98 17.74 3.41 230.00
IndusInd Bank Ltd 823.15 437568.40 33.74 24.40 4.84 40.00

2. Analysis & Recommendation - BUY
YES BANK reported strong 4th quarter results with Net Interest Income and Net Profit rising by 35.78% and
28.07% respectively. Net interest Income, core income of the bank rose from Rs. 7195.90 mn to Rs. 9770.70 mn
in Q4 FY15. Net Profit Jumps to Rs. 5509.90 mn in Q4 FY15 from Rs. 4302.10 mn in corresponding quarter of
previous year. Non Interest Income increased by 32.5% y-o-y to Rs. 5904.00 mn for Q4 FY15. Both Treasury
operation segment and retail segment have grown by 43.77% and 72.06% YOY.
Advances and deposits grew by 35.8% and 22.9% at Rs. 755498.00 mn and Rs. 911758.00 mn respectively as
at 31 March, 2015. YES Bank has delivered another steady quarter with healthy growth in Net Profit of 28.07%
driven by sustained increase in NII, expanding NIMs and stable asset quality. Further, the Bank continued its
focus on building granularity in deposits demonstrated by Retail deposit contribution of 72.06% as on March
31, 2015. YES BANK has signs up MoU with OPIC, Us Governments Development finance Institution, and Wells
Fargo for financing Small Businesses for up to US$ 220.00 mn. The bank has approved a capital raising fund of
upto US$ 1 billion by way of QIP or any other international offering such as ADR/GDR. Yes bank has approved
setting up an IBU in the GIFT City, as per regulatory approvals, which will allow the bank to establish
operations to cater to global requirements of Indian companies and also allow the bank to access international
funding competitive rates. The bank has satisfied with the trust and faith shown by the institutional and retail
shareholders on the Board of Directors, Bank’s performance, growth plans and decisions to maintain the
highest professional standards of the Bank’s management team. Further, with the enabling approvals in place,
YES BANK is fully geared up to capitalize on the renewed economic momentum and achieve its Vision of
emerging the finest large bank in India by 2020. Thus we recommend ‘BUY’ for the scrip with the target
price of Rs. 920.00 for medium and long term.
Company Profile
YES BANK, India’s fifth largest private sector Bank, is a state-of-the-art high quality, customer-centric, service-
driven Bank catering to the “Future Businesses of India”. The bank provides services in Corporate and
Institutional Banking, Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and
Transaction Banking, and Wealth Management business lines across the country, and is well equipped to offer a
range of products and services to corporate and retail customers.
YES BANK has adopted international best practices, the highest standards of service quality and operational
excellence, and offers comprehensive banking and financial solutions to all its valued customers. The Bank has
received numerous recognitions for its world-class IT infrastructure, and payments solutions, as well as
excellence in Human Capital. YES BANK’s total branch’s and ATM network now stands at 630 branches and 1,190
ATMs as on March 31, 2015. BSE has signed a first of its kind Memorandum of Understanding (MoU) with YES
BANK.

3. Awards & Recognitions
• YES BANK has won multiple awards at The Asian Banker Achievement Awards programmes held in Hong
Kong. YES BANK won the following awards :
Best Trade Finance Bank in India – The Asian Banker Transaction Banking Awards 2015.
Best Corporate Trade Finance Deal in India - The Asian Banker Bankers’ Choice Awards 2015.
Best Cash Management Project in India - The Asian Banker Bankers’ Choice Awards 2015.
The Enterprise Risk Technology Implementation of the Year (Asia) – The Asian Banker Risk Management
Awards
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Q4 FY15
YES Bank Ltd. has achieved total interest earned of Rs. 30883.90 million for the 4th quarter of the financial year
2015 as against Rs. 25680.50 million in the corresponding quarter of the previous year. Net Interest Income, core
income of the bank rose by 35.78% at Rs. 9770.70 mn in Q4 FY15. Other income stood at Rs. 5904.40 mn against
Rs. 4455.20 mn in corresponding quarter of previous year. Operating profit for Q4 FY15 was up 37.78% to Rs.
9375.00 mn driven by strong growth in Net Interest Income and Non Interest Income.
Asset Quality
Gross Non Performing Advances as a proportion of Gross Advances was at 0.41%, while Net Non Performing
Advances as a proportion of Net advances was at 0.12% as at Mar 31, 2015. Bank’s specific loan loss Provision
Coverage was at 72.0% as at March 31, 2015. Total Restructured Advances (excluding NPAs) stand at Rs.
3819.00 mn as at 31st, Mar 2015. This represents 0.5% of the Gross Advances.
Particulars (In Rs. Mn) Mar-14 Mar-14 % Chng
Interest Earned 30883.90 25680.50 20.26
Net Interest Income 9770.70 7195.90 35.78
Net Profit 5509.90 4302.10 28.07
Other Income 5904.40 4455.20 32.53
Operating income 9375.00 6804.40 37.78
Asset Quality Q4 FY15 Q4 FY14 Change %
Gross NPAs 3134.00 1749.30 79
Net NPAs 877.20 260.70 236
Gross NPA % 0.41% 0.31% 10 BP
Net NPAs % 0.12% 0.05% 7 BP

4. Capital Funds:
As per Basel III, Tier I Capital stood at 11.5% and total CRAR stood at 15.6% as at March 31, 2015. Total Capital
funds stood at Rs. 161513.00 million as at March 31, 2015.
Segment-wise Revenue
Particulars (Rs.mn.) Q4 FY15 Q4 FY14 Chng %
Corporate 23659.60 19591.70 20.76%
Treasury 9563.50 6652.00 43.77%
Retail 2739.60 1592.20 72.06%
Other Operations 290.10 180.40 60.81%
Latest Updates
• Yes Bank Ltd has approved the proposal to seek final approval of Shareholders for increase in the limit for
the FII / FPI of upto 74% of the paid up share capital of the Bank from the existing limit of 49% of the paid up
share capital.
• YES BANK, has successfully completed ISO 14001 certification for 79 of its locations including all major
branches and 3 corporate offices. In 2014, it became the first bank in India to qualify for ISO 14001:2004
Certification. Bank reported that its international foray by launching its first International representative
office in Abu Dhabi, U.A.E.
• For Q4 FY15, Net Interest Income grew by 35.78% y-o-y to Rs. 9770.70 mn on account of robust growth in
advances.
• Current and Savings Account (CASA) deposits grew by 29.0% y-o-y to Rs.210790.00 mn taking the CASA ratio
to 23.1% as at March 31, 2015 up from 22.0% as at March 31, 2014.
• Total Deposits grew by 22.9% to Rs.911758.00 mn as at March 31, 2015. The Bank’s Balance Sheet grew by
24.9% to Rs. 1361710.00 mn as at March 31, 2015.
• YES BANK’s total branch and ATM network stands at 630 branches and 1,190 ATMs as on March 31, 2015.
• Total Advances grew by 35.8% to Rs. 755498.00 mn as at March 31, 2015.
• The Bank’s RoA expanded to 1.7% for from 1.6% in Bank’s RoE stood at 19.0% for Q4 FY15.

5. Financial Statements & Estimations (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as on March 31st, 2014 to 2017E
YES BANK LTD FY14A FY15A FY16E FY17E
CAPITAL AND LIABILITIES
Capital 3606.30 4177.40 4177.40 4177.40
Reserves and Surplus 67611.10 112622.50 133998.66 158118.42
Deposits 741920.20 911758.50 1075875.03 1242635.66
Borrowings 213142.90 262204.00 301534.60 337718.75
Other Liabilities and Provisions 63877.40 70941.70 78035.87 84278.74
Total Liabilities 1090157.90 1361704.10 1593621.56 1826928.97
ASSETS
Cash and Balances with Reserve Bank of India 45415.70 52406.50 59219.35 65733.47
Balances with Banks and Money at Call and Short notice 13501.00 23165.00 30577.80 38528.03
Investments 409503.60 466052.40 517318.16 569049.98
Advances 556329.60 755498.20 918845.03 1083146.48
Fixed Assets 2934.70 3189.70 3444.88 3686.02
Other Assets 62473.30 61392.30 64216.35 66785.00
Total Assets 1090157.90 1361704.10 1593621.56 1826928.98
Annual Profit & Loss Statement for the period from 2014 to 2017E
Value(Rs. mn) FY14A FY15A FY16E FY 17E
Description 12m 12m 12m 12m
Interest Earned 99813.50 115720.00 129027.80 141930.58
Other Income 17215.80 20464.60 23534.29 26358.40
Total income 117029.30 136184.60 152562.09 168288.98
Interest Expended -72650.90 -80841.70 -89584.00 -97932.10
Gross Interest Income 44378.40 55342.90 62978.09 70356.88
Operating Expenses -17498.70 -22847.10 -25676.53 -28528.05
Operating Profit 26879.70 32495.80 37301.56 41828.84
Provisions and Contingencies -3616.90 -3394.70 -4252.38 -4852.15
Profit Before Tax 23262.80 29101.10 33049.18 36976.69
Tax -7085.00 -9047.50 -10443.54 -11729.01
Profit After Tax 16177.80 20053.60 22605.64 25247.69
Equity Capital 3606.30 4177.40 4177.40 4177.40
Reserves 67611.10 112622.50 133998.66 158118.42
Face Value (Rs.) 10.00 10.00 10.00 10.00
EPS 44.86 48.00 54.11 60.44

6. Quarterly Profit & Loss Statement for the period from 30th Sept 2014 to 30th June 2015E
Value(Rs. mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Interest Earned 28323.50 29716.60 30883.90 31671.44
Other Income 5056.20 5368.10 5904.40 6057.91
Total income 33379.70 35084.70 36788.30 37729.35
Interest Expended -19759.50 -20626.40 -21113.20 -22138.34
Gross Interest Income 13620.20 14458.30 15675.10 15591.02
Operating Expenses -5448.80 -5831.00 -6300.10 -6429.30
Operating Profit 8171.40 8627.30 9375.00 9161.72
Provisions and Contingencies -1195.10 -698.60 -1263.60 -907.01
Profit Before Tax 6976.30 7928.70 8111.40 8254.71
Tax -2150.90 -2525.80 -2601.50 -2616.74
Profit After Tax 4825.40 5402.90 5509.90 5637.96
Equity Capital 4161.00 4172.60 4177.40 4177.40
Face Value (Rs.) 10.00 10.00 10.00 10.00
EPS 11.60 12.95 13.19 13.50
Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 44.86 48.00 54.11 60.44
Operating Profit Margin (%) 26.93% 28.08% 28.91% 29.47%
PAT Margin (%) 16.21% 17.33% 16.57% 17.79%
P/E Ratio (x) 18.32 17.12 15.19 13.60
ROE (%) 22.72% 17.17% 15.47% 15.56%
ROCE (%) 2.62% 2.52% 2.46% 2.40%
Debt-Equity Ratio 13.41 10.05 9.97 9.74
Book Value (Rs.) 197.48 279.60 330.77 388.51
P/BV (x) 4.16 2.94 2.49 2.12

7. Charts

8. Industry Overview
According to the Reserve Bank of India (RBI), the banking sector in India is sound, adequately capitalised and
well-regulated. Indian financial and economic conditions are much better than in many other countries of the
world. Credit, market and liquidity risk studies show that Indian banks are generally resilient and have
withstood the global downturn well.
With a sense of optimism slowly creeping in, the banking industry expects that 2015 will bring better growth
prospects. This optimism stems from factors such as the Government working hard to revitalise the industrial
growth in the country and the RBI initiating a number of measures that would go a long way in helping the banks
to restructure. The recent announcements of RBI, it is felt, are a clear pointer to the future of the restructured
domestic banking industry.
Market Size
The Indian banking sector is fragmented, with 46 commercial banks jostling for business with dozens of foreign
banks as well as rural and co-operative lenders. State banks control 80 percent of the market, leaving relatively
small shares for private rivals.
At the end of February, 13.7 crore accounts had been opened under Pradhanmantri Jan Dhan Yojna (PMJDY) and
12.2 crore RuPay debit cards were issued. These new accounts have mobilised deposits of Rs 12,694 crore (US$
2.01 billion).
Standard & Poor’s estimates that credit growth in India’s banking sector would improve to 12-13 per cent in
FY16 from less than 10% in the second half of CY14.
Investments/developments
There have been many investments and developments in the Indian banking sector in the past few months.
• The United Economic Forum (UEF), an organisation that works to improve socio-economic status of the
minority community in India has signed a memorandum of understanding (MoU) with Indian Overseas Bank
(IOB) for financing entrepreneurs from backward communities to set up businesses in Tamil Nadu.
• The RBI has allowed third-party white label automated teller machines (ATM) to accept international cards,
including international prepaid cards, and said white label ATMs can now tie up with any commercial bank
for cash supply.
• In a major boost for the infrastructure sector, as well as for banks financing long gestation projects, the RBI
has extended its flexible refinancing and repayment option for long-term infrastructure projects to existing
ones where the total exposure of lenders is more than Rs 5000.00 mn (US$ 78.98 million).

9. • With the objective of increasing investment opportunities for Indian alternative investment funds (AIFs), the
RBI has allowed these funds to invest overseas.
• Syndicate Bank is planning to open 300-500 branches in the next financial year
• RBI governor and European Central Bank President has signed an MoU on cooperation in central banking.
“The memorandum of understanding provides a framework for regular exchange of information, policy
dialogue and technical cooperation between the two institutions.
• RBL Bank has announced that it would be the anchor investor in Trifecta Capital’s Venture Debt Fund, the
first alternative investment fund (AIF) of its kind in India with a commitment of Rs 500.00 mn (US$ 7.89
million). This move provides RBL Bank the opportunity to support the emerging venture debt market in
India.
• The RBI has allowed banks to become insurance brokers, permitting them to sell policies of different
insurance firms subject to certain conditions.
• Bandhan Financial Services Pvt. Ltd has raised Rs 16000.00 mn (US$ 252.69 million) from two international
institutional investors to help convert its microfinance business into a full service bank. Bandhan was one of
the two entities to get a banking licence in April 2014 along with infrastructure finance company IDFC Ltd.
• Yes Bank Ltd has signed an MoU with the US government’s development finance institution Overseas Private
Investment Corp (OPIC) to explore US$ 220 million of financing to lend to micro, small and medium
enterprises (MSMEs) in India.
• Reliance Industries Limited (RIL) has said that it has applied for a Payments Bank licence, where the
company will be the promoter and State Bank of India will be its joint venture partner with an equity
investment of up to 30 per cent.
• The RBI has allowed bonds issued by multilateral financial institutions like World Bank Group, the Asian
Development Bank and the African Development Bank in India as eligible securities for interbank borrowing.
The move will further develop the corporate bonds market, RBI said in a notification.
• The Competition Commission of India (CCI) has cleared the merger of ING Vysya Bank with Kotak Mahindra
Bank, which would create the country's fourth largest private sector lender. The proposed Rs 150000.00 mn
(US$ 2.36 billion) deal is not likely to have any appreciable adverse effect on competition in India.
• Tata Consultancy Services Ltd (TCS), India’s largest software services exporter, has announced that it has
expanded its presence in Singapore with the opening of a new 1,000-seat TCS Singapore banking and

10. financial services (BFS) centre. The new centre replaces a 500-seat centre opened in 2011 and will offer a
broader range of services to global banks in the Asia-Pacific region, with a major focus on digital offerings.
Government Initiatives
There have been a lot of developments in the Indian banking sector.
The Government has announced a capital infusion of Rs 69900.00 mn (US$ 1.1 billion) in nine state run
banks, including State Bank of India (SBI) and Punjab National Bank (PNB), but based on new efficiency
parameters such as return on assets and return on equity. In a statement, the finance ministry said, “This
year, the Government of India has adopted new criteria in which the banks which are more efficient would
only be rewarded with extra capital for their equity so that they can further strengthen their position."
The Union cabinet has approved the establishment of the US$ 100 billion New Development Bank (NDB)
envisaged by the five-member BRICS group as well as the BRICS “contingent reserve arrangement” (CRA).
The RBI has decided to allow nominated banks to import gold, including coins, on a consignment basis,
extending its clarification issued in November 2014, which had eased certain categories of gold imports.
To help Micro Small and Medium Enterprises (MSME), RBI has permitted setting up of an exchange-based
trading platform to facilitate financing of bills raised by such small entities to corporate and other buyers,
including government departments and PSUs.
Road Ahead
The Indian economy is now on the threshold of a major transformation, with expectations of policy initiatives
being implemented. Positive business sentiments, improved consumer confidence and more controlled inflation
should help boost the economic growth. Higher spending on infrastructure, speedy implementation of projects
and continuation of reforms will provide further impetus to growth. All this translates into a strong growth for
the banking sector too, as rapidly growing business turn to banks for their credit needs, thus helping them grow.
Also, with the advancements in technology, mobile and internet banking services have come to the fore. Banks in
India are focusing more and more to provide better services to their clients and have also started upgrading their
technology infrastructure, which can help improve customer experience as well as give banks a competitive edge.
Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contact-less credit and debit
cards in the market soon. The cards, which use near field communication (NFC) mechanism, will allow customers
to transact without having to insert or swipe.

11. Outlook and Conclusion
At the current market price of Rs. 822.00 the stock P/E ratio is at 15.19 x FY16E and 13.60 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs. 54.11 and
Rs.60.44 respectively.
Net Income and PAT of the company is expected to grow at a CAGR of 12% & 16% over 2014 to 2017E
respectively.
Price to Book Value of the stock is expected to be at 2.49 x and 2.12 x for FY16E and FY17E respectively.
We recommend ‘BUY’ in this particular scrip with a target price of Rs. 920.00 for Medium to Long term
investment.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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