YES Bank dips on UBS downgrade

Shares of YES Bank have dipped 7% to Rs 800 on the NSE after foreign brokerage UBS downgraded the private sector lender to ‘Sell’ with a price target of Rs 740.

The stock hit a low of Rs 795 so far and has seen a combined 7.02 million shares changing hands on the counter on the NSE and BSE till 1253 hours.

"YES Bank has significantly outperformed the Bank Nifty Index, with a return of 13% year to date compared to 3% for the index (56% in the last 12 months versus 10% for the index). The price rise largely driven by strong loan and earnings growth as well as robust asset quality," the report says.

“Given a sharp re-rating and higher risk of corporate defaults, we believe YES Bank's risk-reward profile is not favourable. Consequently, we downgrade the stock from Buy to Sell, with a lower price target of Rs 740 (previously Rs 1,000)”, it adds.

According to UBS, the bank is most vulnerable to a large corporate default. The broking house lowers earnings estimates for YES Bank by 16% in FY16 and 20% in FY17.

Yes Bank