Yes Bank share price gained over 2% in early trade on Monday after the lender reported its Q1 results. Yes Bank shares rallied as much as 2.13% to ₹20.60 apiece on the BSE.
Yes Bank reported a standalone net profit of ₹801 crore in the first quarter of FY26, registering a growth of 59% compared to ₹502 crore in the same quarter last year. The bank’s net interest income (NII) in Q1FY26 increased by 5.7% year-on-year (YoY) to ₹2,371 crore, led by a fall in the cost of funds.
Net interest margin (NIM) improved to 2.5%, while operating profit increased by 53.4% YoY to 1,358 crore.
Asset quality during the June quarter remained stable, as Gross NPA and Net NPA remained unchanged sequentially at 1.6% and 0.3%, respectively. Provisions in Q1FY26 declined to ₹284 crore from ₹317 crore, QoQ.
Anand Dama, Senior Research Analyst at Emkay Global Financial Services Ltd noted that Yes Bank’s core performance remained weak, with credit growth slowing to 5% YoY and down 2.1% QoQ, while margins remained low at 2.5%.
“However, higher treasury gains led to an earnings beat. The bank expects NIM to slip in Q2 due to lending rate cuts. Yes’s retail portfolio continues to exhibit stress with a slippage ratio of 2.5%, which we believe has led to management churn. The bank’s CET 1 (~13.3%) is sub-par among peers, and would thus call for frequent dilution,” Dama said.
Recently, SMBC agreed to acquire a 20% stake in Yes Bank from SBI (13.19% of the 24% sold) and other banks (6.81% of the total 9.7% stake sold) at a sale price of ₹21.5 per share (implying 1.3x FY27E ABV). However, the transaction is still pending RBI approval and so the bank has halted its search for a new CEO, he highlighted.
Factoring in the Q1 beat, Emkay Global revises up FY26E EPS estimates by 5% and in turn its Yes Bank share price target by 6% to ₹17 apiece from ₹16. However, the brokerage firm retains a ‘Sell’ rating on Yes Bank shares, given sub-par growth, return ratios and higher valuations (1.2x FY27E ABV).
At 9:30 AM, Yes Bank share price was trading 0.20% higher at ₹20.21 apiece on the BSE.
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