UBS slashed its target on Yes Bank by a massive 26 per cent, from Rs 1,000 to Rs 740 per share, citing concerns on credit cost and the lender's increasing exposure to stressed companies.
In a note, UBS said loans approved to stressed companies by Yes Bank have increased by 300 per cent in last three years. UBS also said that the rising credit cost of Yes Bank was not priced in earlier. According to UBS, credit cost of Yes Bank is going to rise further putting stress on its profitability. (Watch: Yes Bank management on UBS report)
UBS cut Yes Bank's FY16 and FY17 earnings estimates by 15 and 16 per cent respectively.
Yes Bank shares closed 7.48 per cent lower at Rs 797.50 apiece, underperforming the broader Sensex, which ended 1.72 per cent lower.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
