Macquarie Capital Securities said it got its assessment on YES Bank wrong – a stock which they have been ‘constructive’ on for the past eight years. It has double downgraded the stock to underperform and slashed the target price by 40 per cent to Rs 165 – the second lowest on the street after Morgan Stanley which has a target price of Rs 125.Macquarie said it has been constructive on YES Bank’s ability to thrive in a risky business segment like structured finance. Suresh Ganapathy , head of financial services research at Macquarie, termed the call on YES Bank as the biggest mistake of his professional life as analyst.“We must eat humble pie today and admit we underestimated risks in structured finance. We got the call wrong,” said analysts at Macquarie led by Ganapathy. Flagging off of aggressive accounting practices in fee income and weakness in retail franchise further dampen fundamental view on the robustness of the business model, added Macquarie.The stock has declined 11 per cent in the last two weeks ahead of its result, ending down 0.1 per cent at Rs 237.4 on Friday.

Source: Economic Times April 30, 2019 03:02 UTC