Yes Bank shares price jumps after Deutsche Bank revises its target stock price; what firm says

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Published: March 14, 2019 1:18:37 PM

Shares of India’s major private sector lender Yes Bank surged in trade on Thursday morning after the global investment firm Deutsche Bank revised its target price upwards.

Yes Bank shares surge after Deutsche Bank revises its target price upwards on Thursday

Shares of India’s major private sector lender Yes Bank surged in trade on Thursday morning after the global investment firm Deutsche Bank revised its target price upwards.

Yes Bank’s share price gained as much as 4% to hit the day’s high at Rs 254. Global research house Deutsche Bank has retained a “buy” call on Yes Bank shares and has raised the target price to Rs 300 from previous price of Rs 280.  The German research firm expects its earnings to become softer but the quality is set to improve going forward. It said that the bank is moving towards stability and better perception of the bank would lead to improved valuations. It expects that the overall loan book of the bank at 16-18% over FY20-21.  

“We expect corporate loan growth to slow down to 12-15 percent, but retail/SME Loan should grow at 40-50 percent. We expect overall loan book growth at 16-18 percent over FY20-21,” Deutsche Bank said in its report.  

Last month, global rating agency Moody’s had changed the outlook for Yes Bank from negative to stable on account of stable financial performance and Reserve Bank of India’s risk assessment report.

On February 13, 2019, Yes Bank announced that it had received the risk assessment report from RBI and the central bank had not found any divergence in the bank’s asset classification and provisioning from its norms. Following this, global research house CIMB had noted that the nil divergence report of RBI and appointment of MD & CEO Ravneet Gill would result in a re-rating of the stock as valuations remain attractive at 1.5x FY20F P/BV.

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