Aditya Birla Money has reiterated 'Buy' on Yes Bank with target price of Rs 985 as against current market price (CMP) of Rs 853.6 in its report.

Commenting on the investment rationale, the broker said, ''Yes Bank delivered strong growth on majority of parameters with credit growth of 35.8% YoY, customer asset (credit + credit substitute) growth of 25.1%, NII growth of 35.8%, other income growth of 32.5% and PAT growth of 28.1%. Some jitters in asset quality was witnessed with restructured assets increasing sequentially from Rs 1.7 billion to Rs 3.8 billion (still manageable at 0.5% of credit). ''

"Going ahead, we expect bank to grow its credit by strong 24.5% CAGR to Rs 1,171 billion over FY15-17E which shall support PAT growth of 25.9% CAGR to Rs 31.8 billion by FY17E,' it said.

''Yes bank has delivered strong performance across all the parameters. We believe the bank tends to be the biggest beneficiary of an easing interest rate cycle. Strong credit growth, expected NIM improvement and stable asset quality shall support PAT growth of 25.9% CAGR to Rs 31.8 billion over FY15-17E. Its superior return ratios of 1.7% RoA and 20% RoE to sustain going ahead. We now value the bank on FY17E basis at P/ABV of 2.4x to arrive at the target price of Rs 985, implying an upside of 15.4%. We recommend BUY rating on the stock", the research report added.

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