YES Bank Q4FY26: Profit up 45%, JM sees Rs 17 target

What changed for YES Bank after Q4FY26 results

YES Bank reported a sharp year-on-year rise in March-quarter profit, but at least one brokerage said the key driver behind the earnings uplift is likely to fade. JM Financial maintained a cautious view and reiterated a Sell rating on the stock. It assigned a target price of Rs 17, which it described as implying about 17% downside. The brokerage said the quarter was good, but the bigger issue is whether profitability can hold up once recovery-led gains normalise. The debate, in short, is about the quality and sustainability of earnings rather than the headline profit growth.

Q4FY26 numbers: profit and NII growth

YES Bank reported standalone net profit of Rs 1,068.42 crore for the March quarter, up 44.7% YoY from Rs 738.12 crore. Net interest income (NII) increased 16% YoY to Rs 2,637.7 crore from Rs 2,276.36 crore. The bank’s net interest margin (NIM) was cited at 2.7% in the provided notes. Loan growth for the quarter was stated at 11.1%, and NIM was up 5 basis points sequentially. Return on assets (RoA) was referenced at 1% for the quarter and 0.8% for the full year in the provided text.

JM Financial’s Sell call: why profitability is still questioned

JM Financial said a significant portion of the current earnings uplift is driven by Security Receipt (SR) recoveries, which it described as finite. It flagged “moderating recoveries” as a major headwind for FY27 and said the recovery pool is nearing exhaustion. The brokerage also said core performance remains weak, raising doubts about how sustainable near-1% RoA is without recovery-led support. JM Financial added that it believes the stock is discounting a structurally stronger profitability profile that is “yet to be demonstrated” without recoveries. On valuation, it said it values YES Bank at 0.9 times FY28 price-to-book value (P/BV) and reiterated its Sell recommendation.

Target revision: Rs 19 to Rs 17

JM Financial’s new target price of Rs 17 is 10.52% lower than its earlier target of Rs 19 issued on January 18. The brokerage framed the cut in the context of the expected tapering of SR recoveries and the uncertainty around sustained returns. The revision is notable because it comes despite the bank delivering a strong YoY profit growth in Q4.

SR recoveries: the earnings support JM says will taper

The management guided for lower SR recoveries of Rs 800-1,000 crore in FY27, according to JM Financial. JM Financial also noted FY26 SR recoveries of Rs 1,560 crore and said earnings support from SRs is expected to taper significantly. It added that the FY27 guidance on SR recoveries may negatively weigh on FY27 credit cost. The brokerage also said credit cost support is nearing exhaustion, making sustainability a key concern.

Guidance snapshot: growth, margins, RoA

YES Bank management guided for double-digit loan growth in FY27 in the 13-15% range. It also guided for retail book growth of 10-11% and corporate growth of 20%. The NIM target was set at 3-3.5% over the next 2-3 years. Management also guided for core RoA incremental improvement of 20-25 basis points in FY27, per JM Financial’s note.

Asset quality signals: slippages, credit cost and PCR

JM Financial said fresh slippages increased to Rs 1,100 crore in Q4 from Rs 1,050 crore in Q3. It also said net slippages fell sharply to 0.32% due to elevated recoveries. Provision coverage ratio (PCR) stood at 81.9%. The brokerage said credit cost rose by 25 basis points quarter-on-quarter to 0.28%, and it also provided a figure of 0.95% excluding SR recoveries.

Other brokerage view in the provided text: ICICI Securities trims target

The provided text also referenced ICICI Securities, which maintained a Hold rating but cut its target price to Rs 21 from Rs 24. The reason cited was elevated retail loan defaults of around 2.8% and expectations of less support from strategic asset recovery in FY27. ICICI Securities set the Rs 21 target based on about 1.1 times its estimated FY28 book value per share (BVPS), according to the notes.

Key numbers at a glance

Valuation and targets: what the signals suggest

Why this matters for investors tracking YES Bank

The core issue highlighted by JM Financial is not whether the bank can deliver a strong quarter, but whether it can sustain returns when SR recoveries fade. When recoveries contribute materially to reported profitability, investors typically look for evidence that core earnings can take over. The guidance itself acknowledges lower SR recoveries in FY27 versus FY26, which helps explain why credit-cost and RoA sustainability have become central to brokerage commentary. At the same time, management’s loan growth and margin targets indicate the bank is aiming to improve core profitability over the next few years.

Conclusion

YES Bank’s Q4FY26 results showed strong YoY growth in net profit and NII, alongside a modest sequential improvement in NIM. But JM Financial reiterated a Sell and cut its target to Rs 17, arguing that recovery-led support is finite and sustainability of near-1% RoA remains uncertain. Management guidance points to slower SR recoveries in FY27, with targets for higher loan growth and improved NIM over the next 2-3 years. The next set of quarters will be watched for how profit mix shifts as recovery support tapers.