Yes Bank Q2 Results Today as Stock Nears 52-Week Low

Yes Bank reports September quarter results today, Saturday, after its shares fell 3.42% to Rs 17.50 on Friday, just above the 52-week low of Rs 16.96, as investors weigh strong loan growth against a drop in the CASA ratio. In its provisional update, loans and advances grew 23.8% year on year to Rs 3.10 lakh crore, and deposits rose 19.5% to Rs 3.54 lakh crore. Excluding FCNR(B) and related effects, advances grew 17.7% and deposits 13.2%. The weaker spot was CASA, which grew only 6.6% year on year, taking the ratio down to 30.0% from 32.7% in June and 33.7% a year earlier. The June quarter set the baseline: net profit rose 33.7% to Rs 1,071 crore, net interest margin was 2.7%, and gross NPA stood at 1.3%. A falling CASA ratio matters because low-cost deposits are what protect a bank’s margins, and Yes Bank’s margin of 2.7% is already thin compared with larger private peers. Investors will check whether the sharper deposit growth came at a higher cost and whether profit growth can hold near the 34% seen in June. Asset quality gains in the last quarter, with gross slippages down to Rs 964 crore, will also be tested. The stock has ranged between Rs 16.96 and Rs 25.78 over the past 52 weeks, with a market cap of around Rs 54,932 crore, trading much closer to its low than its high. Today’s numbers will show whether growth is translating into earnings despite the CASA slippage. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in Yes Bank. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.