Yes Bank share price dips over 15% in YTD. Accumulate or exit?

Market


Yes Bank share price has been under sell off heat after climbing to its 52-week high of 24.75 on 13th December 2022. In these near one month time, Yes Bank shares have tumbled to the tune of 30 per cent whereas in YTD time, it has nosedived over 15 per cent. 

According to stock market experts, this dip in Yes Bank shares is short lived as banking major is expected to recover from its lows. They said that Yes Bank stock price has tumbled after weak looking Q3 results and recent Bombay High Court order quashing Yes Bank administrator’s decision to write-off Additional Tier-1 or AT-1 bonds.

On why Yes Bank share price is falling, Ravi Singhal, CEO at GCL Broking said, “Recently, Yes Bank shares have fallen due to two major reasons — Bombay High Court quashing Yes Bank administrator’s decision to write off AT-1 bonds and weak looking Q3FY23 results. Both reasons for Yes Bank stock price tumble are short lived as Yes Bank is planning to move to Supreme Court against the Bombay High Court order and Q3 results are looking weak due to provisioning. The private lender has managed to contract its stress after selling its stress pool to JC flowers ARC. Yes Bank has also reported growth in its operating profit in both quarter-on-quarter (QoQ) and year-on-year (YoY) terms. So, I would advise Yes Bank shareholders to hold the scrip with stop loss at 17 and take this dip as an opportunity to accumulate around 18 apiece levels.”

Expecting rebound in Yes Bank shares, Chinmay Barve, Head — Technical and Derivative Research at Profitmart Securities said, “Yes Bank has crucial support placed at 17 apiece levels and Yes Bank shareholders are advised to maintain stop loss at 17 levels. On chart pattern, there is strong possibility of Yes Bank shares bouncing back strongly from its recent lows and go up to 20 and 22 apiece levels. However, in case the stock breaks 17 support then 15 would be a good buying range for long term investors. High risk traders and investors can buy the stock at current levels for short term target of 20 but for those who want to play safe, they can buy Yes Bank shares at around 15 and hold long.”

Giving Yes Bank shareholders to hold the scrip despite 30 per cent dip from 52-week high, ICICI Securities says, “We see a gradual turnaround in relevant operating metrics driven by granular retail assets as well as liabilities and improved confidence in stability of the franchise. Post the stressed pool sale, adjusted book value (adjusted for net NPAs) has been favourably impacted to the extent of 8-10% despite lower earnings build-up for FY23E. Also, equity capital raise of 89 bn in Q3FY23 from Carlyle and Advent provides YES with growth and confidence capital. To that extent, the stock can now command a valuation of 1.4x FY24E ABV (earlier 1.2x).”

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Pointing towards challenges that Yes Bank stocks may have to face, ICICI Securities said, “We remain cognisant of the risks arising from the delay in resolution of stressed pool, incremental ageing-related provisions, modest RoE profile during transition, decision to write-down AT-1 bonds being challenged in Court and stock supply overhang post the expiry of lock-in shares in Mar’23. Maintain HOLD with a revised target price of 19.3 per share.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.


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