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MOSL: Morning India (19/January/18): 1. GST; 2. Bharti Airtel; 3. Hindustan Zinc; 4. UltraTech Cement; 5. Yes Bank; 6. Bharti Infratel; 7. D B Corp; 8. Cyient; 9. DCB Bank; 10. Zensar Tech

MOrning India (19/January/18): 1. GST; 2. Bharti Airtel; 3. Hindustan Zinc; 4. UltraTech Cement; 5. Yes Bank; 6. Bharti Infratel; 7. D B Corp; 8. Cyient; 9. DCB Bank; 10. Zensar Tech

 

Today’s top research idea

Yes Bank: Loan growth accelerates further; asset quality largely stable

• YES has a well-laid strategy for growing small business loans (most of which qualify as priority sector loans) and cross-selling to acquired customers, which would help granular retail fee growth.
• On the balance sheet front, the initial focus of the bank will be on growing the liability side first, and as customer relationships age, the focus would be on cross-selling its retail assets.
• We believe that while YES is likely to maintain industry leading growth, the improvement in asset quality (we expect PCR to improve to 61.4% by FY19E) and consistency in operating metrics are critical for sustained re-rating of the stock.
• We estimate YES to deliver 30% earnings CAGR over FY18-21E and revise our TP to INR410 (2.7x Mar-20E ABV)

Piping hot news

GST Council rejigs rates of 29 items, 53 services

• India announced a significant revamp of the goods and services tax (GST) framework, including cuts in the rates on 20-litre packaged drinking water, biodiesel, diamonds and precious stones, sugar candies, tailoring services, amusement parks and low-cost housing construction services. The total revenue loss on account of these cuts, which take effect on January 25, is pegged at Rs 1,000-1,200 crore.