YES Bank shares rise after five sessions but analysts are not bullish; here's why (2024)

Shares of YES Bank recovered on Wednesday after falling for the last five trading sessions. YES Bank stock had lost 16% from April 29 (Rs 27.11) to May 7 (Rs 22.87) this year. However, shares of the private sector lender rose 1.88% intraday today to Rs 23.30 against the previous close of Rs 22.87 on BSE. The stock rose to a 52-week high of Rs 32.81 on February 9, 2024 and fell to a 52-week low of Rs 14.10 on October 23, 2023. Market cap of the bank stood at Rs 66,281 crore on BSE.

Despite today’s recovery rally, the stock is down 23.28% in three months and 12% in a week.

The banking stock has a one-year beta of 1.4, indicating very high volatility during the period.

In terms of technicals, YES Bank shares are trading lower than the 5 day, 20 day, 30 day, 50 day, 100 day but higher than the 150 day and 200 day moving averages. The stock has a relative strength index of 37.4 signaling the stock is trading neither in the overbought nor in the oversold zone.

Ganesh Dongre, Senior Manager - Technical Research, Anand Rathi Shares and Stock Brokers said, "On the daily chart, stock has seen a bearish engulfing pattern, which is bearish in nature. Also looking toward the other parameter, RSI is still turning downward. So in this current scenario, traders should avoid this stock till the next support level of Rs 16–18."

Abhijeet from Tips2trades said, "YES Bank stock price isbearish on the Daily charts with strong resistance at Rs 24.3. A Daily close below support of Rs 22.5 could lead to a fall till Rs 20.4 in the near term."

Osho Krishan from Angel Broking said, "YES Bank is hovering near the 61.80% Fibonacci retracement of the rally from Rs 16 to Rs 32 odd levels, well below the cluster of its short-term EMAs on the daily chart. The recent developments construe a breakdown below its previous swing low and have headed toward 200 SMA placed around the 21-odd zone. For now, the counter looks a bit indecisive, and any breach below the mentioned 200 SMA is likely to disrupt the short-term view. On the flip side, a series of resistances can be seen from the Rs 24-26 zone, and till it is sustained below the same, some pressure is likely to persist in the counter."

Riyank Arora, Technical Analyst at Mehta Equities said, "The stock has given a good breakdown below its support mark of Rs 23.30 and trading below the same. With the stock witnessing a good surge in volumes and facing continuous supply on higher levels, it is expected that the stock should head lower towards Rs 20-21 zone. A stop loss can be kept at Rs 25 mark for all active short positions on the stock."

After Q4 earnings of the lender were announced, Kotak Equities turned bearish on the stock. It gave a sell call as risk-reward remains unfavourable. The current YES Bank stock price factors in most of the positive outcomes while the delivery of better return ratios and steady growth that is similar to other frontline banks are still a few years away, the domestic brokerage said. Kotak said it had an unchanged fair value of Rs 19 on YES Bank, as it valued the bank at 1.2 times book and 13 times estimated FY2026 EPS for return on equity that was still below 10 per cent.

ICICI Securities revised its price target price to Rs 20 after Q4 earnings and retained its sell call on the private lender.

"We estimate sharp improvement in RoA to 1.0% by FY26E vs FY24 RoA of 0.3%, led by improving NIM trajectory and benign credit costs. Valuations, however, remain unattractive with the stock trading at 1.9/1.8/1.6x FY24/25E/26E ABV. Retain SELL with a revised price target of Rs 20, valuing the stock at 1.2x FY26E ABV," said ICICI Securities.

On April 27, the private sector lender reported a 123% rise in net profit to Rs 452 crore for the quarter ended March 31 against Rs 202 crore clocked in the year-ago period. Gross non-performing assets stood at 1.7 percent, down from 2.2 percent in the same quarter last year. Net NPAs in the March 2024 quarter stood at 0.6 percent, a 0.80 percent improvement on a year-on-year basis.