1Q27: core-ROA catching up

Research evidence excerpt

1Q27: core-ROA catching up

Global Markets Research

Yes Bank YESB.NS YES IN 21 July 2026

EQUITY: BANKS

1Q27: core-ROA catching up Rating Remains Neutral

Target price

Broad-based strength across growth, margins and profitability Increased from INR 23.00 INR 21.00

Yes Bank reported strong core-PPOP of INR14.1bn (+62% y-y, 5% above our estimate of Closing price INR 22.93 20 July 2026INR13.5bn) in 1QFY27, led by strong NII (1% above est), robust fee income and inline opex. NII

growth was supported by a 4bp q-q margin improvement (vs our est of 3bp decline q-q) while fee

Implied upsideincome included a ~INR1.2bn interest on IT refund in 1Q27. A slightly higher credit cost of 56bp (vs +0.3%

est 50bp) was offset by strong treasury gains and a lower tax rate, resulting in PAT of INR10.7bn (vs

Market Cap (USD mn) 7,462.2

our est of INR8.4bn). Excluding one-offs (interest on IT refund, SR recovery) PAT was 8% above ADT (USD mn) 32.3

our estimate and core ROA reached 78bp (Fig.1). Loan growth (+4% q-q, +18% y-y) picked up

pace while deposit growth lagged (-1% q-q, +14% y-y). Management maintained its SR recovery Relative performance chart

guidance of INR8-10bn in FY27E despite a lower quantum in 1Q27. We raise loan growth and

margin estimates, resulting in 6-7% higher earnings for FY27-28F. While Yes Bank’s return profile is

on a gradually improving trajectory, we believe the current valuation at 1.1x Mar-28F BVPS

adequately captures the positives. We maintain our Neutral rating with a higher TP of INR23 (

INR21 previously), valuing the bank at 1.1x (unchanged) Mar-28F BVPS.

Margins improve 4bp q-q; management expects 30bp improvement over two years

Calculated NIM improved to 2.79% (+4bp q-q, vs est of -3bp) resulting in strong NII growth of

6% q-q vs loan growth of 4% q-q.