Citi Research has upgraded Yes Bank to 'Buy' from 'Neutral' with target price of Rs 1,025 in its report.

Commenting on the investment rationale, the stock broker said, "Yes Bank stepped off the growth pedal in 2013; but has in the process consolidated its business, mix on loans, deposits, branches and fees. There's still some way to go before it matches its peers-or is ideally de-risked: but the franchise build (vis a BS or PL build) is underway, and we believe is getting increasingly institutionalized.

While mngt remains watchful of the environment, an improving market, liquidity and BS mix gives it significant growth, margins and earnings leverage. We think the market will be watchful of accelerating risk-it just might watch Yes accelerate past peers on earnings, growth and margin momentum-if the environment improves, and management sticks to its newer franchise-building focus.

 Yes Bank does have its share of risks-small size, large wholesale funding, some asset challenges, which have not gone away, and concentrated fee incomes. These would still leave YesB more vulnerable than peers in an economic reversal, or with any business slip-ups.''

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