Yes Bank is a good private sector bank where one can invest into from a medium to long term view. The stock has corrected from it’s highs of 388 it made recently and is available at a very decent valuation of 320. I am very positive on the banking space as a whole and if I get a chance to grab any good banking stock on a correction, I would grab that opportunity because banks might continue to outperform.

If you look at the financial results of Yes Bank, then it posted revenues of 739cr in Q1 FY11 (+36% YoY) and net profit of 156cr (+56% YoY). In Q2 FY11, Yes Bank posted an exceptional revenue of 953cr (+81% YoY) and net profit of 176cr (+59% YoY). These kinds of growth on YoY basis speaks volumes about the company and I don’t see why the stock will not outperform the markets or it’s peer banking stocks in coming future.

Market capital of Yes Bank is around 11,000cr right now and is trading at a P/E of 23 as per FY10 earnings. However in FY11, we are about to see net profit between 650-700cr as against 477cr. That kind of earnings suggest that the stock could easily see an upmove of 30%+ from current levels. The possible targets I’m seeing for this stock in the next 6-8 months is close to 420 and I feel that the stock can definitely head very close to those kind of levels or even beat it.

Buy Yes Bank with targets of 420+

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