Credit Suisse's Ashish Gupta, Prashant Kumar and Kush Shah released a note on Yes Bank today with a Outperform rating and a Rs 863 price target. The analysts gave four driving reasons for the rating:

1. In our meeting with Yes Bank, management appeared comfortable on corporate loan growth and asset quality. YTD customer asset growth for the bank has picked up to 23% YoY from 15% YoY. Mgmt was confident of sustaining and even improving this pace of growth as it has witnessed easing of competitive intensity in corporate segment.

2. The bank is also driving an acceleration in its SME and business banking loan growth through its expanded branch network. Business banking is witnessing strong growth, which is also helping in PSL compliance and therefore is accretive to margins. The bank is also a key beneficiary of wholesale rate moderation and we expect NIMs to expand ~20 bp in FY16.

3. Expansion in branch network continues at a healthy pace. This is aiding the improvement in liability mix with share of retail deposits increasing to ~45%.

4. With growth outlook improving and likely expansion in NIMs, we expect the bank to deliver 24% EPS CAGR and 20% ROE, at 13x earnings, we maintain Outperform.

Shares of the bank gained Rs 3, or 0.36%, to trade at Rs 836.30. The total volume of shares traded was 284,679 at the BSE (1.38 p.m., Friday).

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