YES Bank share price targets: Goldman Sachs, Citi among 10 brokers with 'Sell' calls; what Nomura, others say

For the September quarter, higher operating expenses and lower fees weighed on core pre-provision operating profit (PPOP), but profit after tax (PAT) was in line with expectations due to non-core income, Nomura said in a note.

"AT1 bond reinstatement impacts Q2 shareholders’ equity by 12 per cent. The stock is down 20 per cent post the judgement and trades at 0.9x Sep-28F BVPS. We maintain our Neutral rating with a lower target of Rs 18 from Rs 23 previously, valuing the bank at 1 time (vs 1.1 times previously) Sep-28F BVPS," Nomura said.

The Supreme Court upheld the write-down of Rs 8,415 crore of AT1 bonds on October 15. YES Bank did not recognise any impact in its September quarter results, but its indicative pro forma figures show a net loss of Rs 5,217 crore and a common equity tier-1 (CET1) ratio of 11.4 per cent.

As per Bloomberg data, there are 10 'Sell' calls, two 'Buy' recommendations and two 'Hold' ratings on YES Bank, even after a 26 per cent drop on the counter in the past 12 months.

Nuvama Institutional Equities said the potential AT1 bond-related hit could constrain growth acceleration, while weak core profitability underpinned its 'Reduce' rating on the stock. It cut its target price to Rs 16 from Rs 22. SMFG's potential capital infusion remains a key monitorable, it said.

Nuvama said SMFG may need to infuse capital, potentially taking its stake above 26 per cent and triggering an open offer. A majority stake could also pave the way for a merger of its NBFC, SMFG India Credit Co Ltd, with the bank.

"Thus, SMFG’s response to these developments remains a key monitorable," it said. The brokerage believes the potential AT1 bond-related hit could constrain growth acceleration, while weak core profitability underpins its 'Reduce' rating. It has cut its target price to Rs 16 from Rs 22, based on 0.9 times September 2028E adjusted book value (ABV).

Ventura Securities maintained its 'Buy' rating and a target price of Rs 24.2, implying 39 per cent upside over the next 24 months from the prevailing price.

On YES Bank's Q2 results, Goldman Sachs said core revenue growth was in line with expectations at 20 per cent YoY, but PPOP was higher than expected. The PAT beat was driven by strong recoveries from legacy assets, which tend to be volatile.

"NIM declined 10 bps QoQ, and adjusted for the impact for leverage against FCNR-B deposits, we believe the underlying margins moderated sequentially. Loan growth, ex-FCNR related impact was 3 per cent QoQ and 16 per cent YoY as disclosed earlier - this was helped by commercial banking as expected," Goldman Sachs said.