YES Bank shares down 28% from one-year high levels; will the stock fall further?

Shares of private lender YES Bank Ltd settled 0.51 per cent lower at Rs 23.62 on Friday. At this closing price, the stock has slipped 8.06 per cent in the past one month and 28.01 per cent from its 52-week high price of Rs 32.81, a level seen on February 9 this year.

Analysts largely suggested it can slip further towards Rs 19-20 levels. Kotak Institutional Equities analysts have given a 'Sell' call for YES Bank's stock while pegging it at a fair value of Rs 19.

G Chokkalingam, Founder and MD of market research firm Equinomics Research, said, "We have a 'Sell' view on the stock. Banking industry has several headwinds such as lower credit growth, requirement of provisions for expected credit loss, need to moderate credit-deposit ratio, intensified competition in the industry for higher CASA (low cost deposits) and poor overall deposit growth in the industry."

"Apart from these headwinds, YES Bank lowered the net interest margin (NIM), which would act as a dragger. Hence, we have assigned a 'Sell' rating with a downward target of around Rs 20," Chokkalingam added.

During the June 2024 quarter (Q1 FY25), the bank's NIM slipped to 2.4 per cent from 2.5 per cent in the year-ago period. However, YES Bank's net profit rose by 46.7 per cent to Rs 502 crore Q1 FY25 from Rs 343 crore in the corresponding period last year.

"Investors with a high-risk appetite should only consider entering in this stock. Those holding can continue with their positions," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

Technically, "no clear trend emerging" on the counter, an analyst said. Near-term support could be seen at Rs 22 level.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "YES Bank has been trading in a range of 5-7 points over the last few months, with no clear trend emerging. Currently, the stock is near the lower end of the consolidation range, which aligns with a historical support level at 200-SMA (simple moving average). On the specific front, Rs 22 is likely to be seen as support, while 27-28 remains a daunting task for the counter in the comparable period." 

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 22 and resistance at Rs 25. A decisive close above Rs 25 level may trigger a further upside towards Rs 27."

As per BSE, the lender's stock has a price-to-equity (P/E) ratio of 52.72 against a price-to-book (P/B) value of 1.77. Earnings per share (EPS) stood at 0.45 with a return on equity (RoE) of 3.35.