Yes Bank reports 26.6% Net Income growth in 2016 and 18.9% Revenue growth

27-04-2016 • About Yes Bank ($YESBANK) • By InTwits

Yes Bank reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Yes Bank is a fast growth stock: FY2016 revenue growth was 18.9%, 5 year revenue CAGR was 28.3% at FY2016 ROIC 9.0%
Yes Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 1.5%
CAPEX is quite volatile: ₹2,667m in FY2016, ₹1,131m in FY2015, ₹1,337m in FY2014, ₹1,069m in FY2013, ₹955m in FY2012
The company has business model with low profitability: ROIC is 9.0%
It operates with high leverage: Net Debt/EBITDA is 5.0x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

The company's Revenue surged on 18.9%. Revenue decline was accelerating on average at -8.4 pp per annum in the last 5 years.

Net Income margin increased slightly on 0.95 pp from 14.6% to 15.6% in FY2016. Net Income margin followed a growing trend at 0.48 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)

In FY2016 the company had CAPEX/Revenue of 1.6%. Yes Bank showed small growth in CAPEX/Revenue of 0.52 pp from 1.1% in FY2013 to 1.6% in FY2016. For the last three years the average CAPEX/Revenue was 1.2%.

Return on investment

The company operates at good ROE (19.9%) while ROIC is low (9.0%). ROIC showed almost no change in FY2016. ROE decreased slightly on 1.4 pp from 21.3% to 19.9% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at 8.4% and was growing since that time. During FY2012-FY2016 ROE topped in FY2014 at 24.9% and was declining since that time.

Leverage (Debt)

Debt surged on 20.4% while cash surged on 10.2%.

Yes Bank has short term refinancing risk: cash is only 55.2% of short term debt.

Management team

The company's CEO Rana Kapoor has spent 7 years with the company.

Financial and operational results

Yes Bank ($YESBANK) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	71,485	95,544	116,169	136,783	162,603	18.9%
Net Income	9,770	13,007	16,113	19,974	25,297	26.6%
Balance Sheet
Cash	23,325	33,388	45,416	52,407	57,762	10.2%
Short Term Debt	83,949	128,944	114,087	99,320	104,575	5.3%
Long Term Debt	59,564	81,603	101,106	166,293	215,185	29.4%
Cash flow
Capex	955	1,069	1,337	1,131	2,667	135.8%
Ratios
Revenue growth	53.0%	33.7%	21.6%	17.7%	18.9%

Net Income Margin	13.7%	13.6%	13.9%	14.6%	15.6%	1.0%
CAPEX, % of revenue	1.3%	1.1%	1.2%	0.8%	1.6%	0.8%

ROIC	9.8%	8.4%	8.4%	8.7%	9.0%	0.3%
ROE	23.1%	24.8%	24.9%	21.3%	19.9%	-1.4%

Peers in Banks

Below you can find Yes Bank benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kotak Mahindra Bank ($KOTAKBANK)	18.4%	22.9%	7.1%	26.1%	-
Dcb Bank ($DCBBANK)	-	26.2%	22.5%	25.3%	20.8%
Syndicate Bank ($SYNDIBANK)	32.2%	11.9%	7.9%	20.2%	-
Axis Bank ($AXISBANK)	-	24.5%	13.1%	15.6%	14.9%
Andhra Bank ($ANDHRABANK)	33.3%	15.4%	13.0%	14.5%	-
Median (28 companies)	29.3%	15.7%	10.6%	10.2%	4.3%
Yes Bank ($YESBANK)	-	33.7%	21.6%	17.7%	18.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Bank Of India ($BANKINDIA)	2.0%	1.1%	1.5%	3.6%	-
State Bank Of Mysore ($MYSOREBANK)	1.6%	1.3%	-	3.5%	1.4%
Jammu & Kashmir Bank ($J&KBANK)	1.4%	1.3%	2.2%	3.3%	-
Lakshmi Vilas Bank ($LAKSHVILAS)	2.1%	1.4%	1.6%	2.4%	2.4%
Dcb Bank ($DCBBANK)	9.0%	7.0%	1.6%	1.9%	2.2%
Median (28 companies)	1.2%	1.2%	1.3%	1.3%	1.6%
Yes Bank ($YESBANK)	1.3%	1.1%	1.2%	0.8%	1.6%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Karnataka Bank ($KTKBANK)	6.8%	10.2%	7.7%	10.4%	-
Axis Bank ($AXISBANK)	9.6%	8.9%	9.1%	8.8%	7.6%
Kotak Mahindra Bank ($KOTAKBANK)	6.8%	6.5%	7.1%	8.5%	-
Lakshmi Vilas Bank ($LAKSHVILAS)	6.5%	7.5%	0.7%	6.1%	5.8%
Dcb Bank ($DCBBANK)	-	3.4%	5.1%	6.0%	5.2%
Median (28 companies)	7.2%	6.1%	3.2%	4.2%	4.4%
Yes Bank ($YESBANK)	9.8%	8.4%	8.4%	8.7%	9.0%

Yes Bank stock price chart

Yes Bank financials

mln.	FY2010	FY2011	FY2012

Revenue	193,807	46,722	71,485
EBITDA	0.000	0.000	0.000
Net income	4,777	7,271	9,770
CAPEX	156.8	271.8	955.4
Debt	48,731	67,675	143,513
Cash	19,953	30,760	23,325

About Yes Bank

Yes Bank Limited provides banking and financial services in India and internationally. It operates through Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations segments. The company offers corporate and commercial banking services, including working capital finance, specialized corporate finance, trade finance, cash management, vendor and channel finance, treasury risk management services, debt capital market offering, liquidity management solutions, and investment banking solutions. It also provides financial services to corporates, public sector undertakings, central and state government entities, and NBFCs. In addition, the company offers trade finance, cash management services, financial market products, and INR account services to international customers. Further, the company provides business banking services to small and medium businesses; and retail banking products, including secured business loans, car loans, two wheeler loans, commercial vehicle loans, construction equipment loans, loans against securities, tractor loans, gold loans, personal loan products, and home loans. Additionally, it offers transaction banking services comprising cash management services; trade finance services; and bank to issuer, dividend/interest payout, and escrow account services. The company also provides investment banking services, including mergers and acquisitions, divestitures, private equity syndication, and IPO advisory services; and cards, mobile banking, online banking, tax and insurance solutions, and remittance services. As of December 31, 2014, it operated 600 branches in metro, urban, semi-urban, and rural centers in India. The company also operates 1,139 ATMs; and 2 national operating centers in Mumbai and New Delhi. Yes Bank Limited was incorporated in 2003 and is headquartered in Mumbai, India.