Yes Bank share price retraces 20% from 52-week high. Buy, sell or hold?

Market


Yes Bank shares recently made 52-week high of 24.75 apiece on 13th December 2022. However, after ascending to this peak, Yes Bank share price has remained an ideal ‘sell on rise’ stock on Dalal Street. Yes Bank share price today continue to attract bears and made its intraday low of 20.05 per share, clocking near 3 per cent intraday loss in early morning deals. However, if we compare Yes Bank stock price today with its 52-week high, the stock has retraced to the tune of near 20 per cent in near one month.

According to stock market experts, stock is expected to remain range bound till March 2023 as three-year lock-in for leading banks like IDFC First Bank, Axis Bank, Kotak Mahindra Bank, etc. is ending this March. So, market is buzz about profit booking by these private lenders as Yes Bank share price has almost doubled in last three years and after end of lock-in period, these banks may think of profit booking in March 2023 (may be partially if not fully).

However, experts said that Yes Bank is doing well after its management came under the control of State Bank of India (SBI). Apart from this, Finance Ministry’s mechanism to tackle bad loans is going to aide stressed banks including Yes Bank. So, any dip around 17.50 to 19 levels should be seen as good buying zone maintaining stop loss below 17 for short term target of 28 and for medium to long term target of 36 and 44 apiece levels.

On why Yes Bank shares are dipping after climbing to a new 52-week high in December 2022, Ravi Singhal, CEO at GCL Securities said, “Yes Bank shares are dipping after rising to a new 52-week high as retail investors are keeping the fact in mind that thee year lock-in of Axis Bank, IDFC First Bank, HDFC Bank, etc. is ending this March and in last three years, Yes Bank share price has ascended to the tune of near 100 per cent. So, retail investors are expecting at least partial profit booking by these private lenders once the lock-in period ends.”

However, Ravi Singhal of GCL Securities maintained that fundamentals of Yes Bank have been continuously improving after its management came under the control of SBI. Its Q3 business update are also strong and it has managed to improved its loans and advances figures during October to December 2022 quarter. Ravi Singhal said that any dip in Yes Bank shares should be seen as buying opportunity till it is trading above 17 apiece levels.

On one should not bother about the decline in Yes Bank shares after the end of three year lock-in, Sandeep Pandey, Business Partner at Emkay Global Financial Services said, “The Finance Ministry’s mechanism to tackle bad loan is going to have a long term impact on Indian banking system. This ARC (Asset Reconstruction Company) mechanics is aiding NPA hit banks to sell out its NPA and contain its provisioning, which leads to improve in the margins of the company in short term. In previous system, a lender had to carry the burden of bad loans for even decades, which is now a distinct probability after this new mechanism to handle the bad loan problem in Indian banking system.”

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On suggestion to positional investors in regard to Yes Bank shares, Ravi Singhal of GCL Securities said, “Yes Bank shares are in 17 to 24 range and any dip in 17.50 to 19 should be seen as accumulation zone for Yes Bank shareholders whereas fresh investors can add Yes Bank in their portfolio at arund 18 apiece levels (if it comes at these levels) and maintain strict stop loss below 17. A safe investor can start buying from 19 till 17.50 apiece levels maintaining stop loss below 17 apiece levels.”

In December 2022, Yes Bank said that it has transferred stressed assets of 48,000 crore to JC Flowers Asset Reconstruction Pvt Ltd, a move that will wipe the bank’s book clean of dud assets.

Sharing its business update for the third quarter of the current fiscal (Q3FY23), Yes Bank on Wednesday said that its advances were up at 196,826 crore, from 176,241 crore, up nearly 12 per cent year-on-year (YoY) and up over 2 per cent from 192,235 crore quarter-on-quarter (QoQ).

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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