Yes Bank share price retraces from 2-year high. Should you accumulate?

Yes Bank share price retraces from 2-year high. Should you accumulate?


Yes Bank share price has rebounded after retracing from 2-year high on Wednesday session. Yes Bank share price today opened downside but soon attracted buying interest among market bulls and climbed to intraday high of 22.75 apiece on NSE, logging around 3 per cent rise from its Wednesday close of 22.10 apiece levels. In last five sessions, Yes Bank shares have surged from 17.75 to 22.75 levels, logging near 28 per cent rise in this time. However, on Tuesday, the private bank stock hit its new 52-week high of 24.75 per share on NSE.

According to Prabhudas Lilladher, Yes Bank shares need to sustain above 20.75 apiece levels to maintain positive bias. Morgan Stanley report says that strong cyclical improvement can be expected in the private lender’s performance in next few years. The brokerage is also expecting strong RoA improvement helped by higher PPoP margins/lower credit costs as macro improves further.

Highlighting the strong fundamentals that may favour Yes Bank shares, Morgan Stanley research report says, “We expect strong RoA improvement to 1% by F25, helped by higher PPoP margins/lower credit costs as macro improves further. But at 1.6x F24 P/BV, the stock is pricing this in. Beyond 1% RoA, improvement will be tough and gradual as we see much higher competitive intensity in this cycle.”

The brokerage went on to add that Yes Bank has focused on reducing asset quality challenges by accelerating provisions and cleaning up its balance sheet (organically as well as via asset sales). We expect its gross impaired loans to fall to 9% by end-F23 from a peak of 22% in Mar-20. Further, unlike the previous cycle, the bank has focused on increasing the share of retail on both sides of the balance sheet. Indeed, the share of CASA + retail deposits currently amounts to 48% of total funding (vs. 33% in Mar-20). On assets, retail/SME loans have increased to 66% vs. 44% in Mar-20 (implied CAGR of 23%).

Yes Bank share price target

Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, “Yes Bank share price has witnessed strong improvement in the bias after the long consolidation phase hovering between the 12 and 17 levels and indicated a breakout with decent volume participation to strengthen the trend. The stock has moved from 17 levels to 24.75 from Friday to Tuesday sessions but witnessed some heavy profit booking on Wednesday to close near 22 zone.”

Vaishali Parekh of Prabhudas Lilladher went on to add that further rise in Yes Bank share price is anticipated but the stock needs to sustain above the previous peak zone of 20.75 levels to maintain the positive bias it has gained in last five sessions.

“If Yes Bank share price sustains above 20.75 apiece levels then we expect for the initial targets of 28 to 32 and then 37 levels in the next two to three months. Our view gets negated once a decisive breach below 18 zone is witnessed.”

Asking Yes Bank shareholders to hold the stock for long term, Ravi Singhal, CEO at GCL Securities said, “Yes Bank shareholders can hold the stock for long term or say one year keeping 44 target in mind.” However, Ravi Singhal of GCL Securities advised Yes bank shareholders to upgrade trailing stop loss to 17 apiece levels.

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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