YES Bank shares surge 31% in two days; what's next on tech charts: Rs 25 or Rs 35?

Shares of YES Bank Ltd have finally witnessed a strong spurt after a long time and briefly traded above the Rs 30 mark. The stock today jumped 20 per cent to hit its one-year high price of Rs 30.50. It eventually settled with 29.83 per cent gains at Rs 29.83 on Wednesday. At this price, the counter has zoomed 30.83 per cent in two straight trading days. The private lender's turnover came at Rs 720.02 crore, commanding a market capitalisation (m-cap) of Rs 85,801.02 crore.

The sharp rise came after HDFC Bank said it has received approval from Reserve Bank of India (RBI) to acquire up to a 9.5 per cent stake each in six private lenders, including YES Bank. Other than YES Bank, the approval lets HDFC buy stakes in ICICI Bank, IndusInd Bank, Axis Bank, Bandhan Bank and Suryoday Small Finance Bank.

The Reserve Bank has also mandated that the group acquire major shareholding within one year in all the banks from the date of the approval, without which it would stand cancelled.

Prashant Kumar, MD & CEO at YES Bank, in a recent earnings call, said, "In quarter 3 (Q3 FY24), our non-interest income was at Rs 1,195 crore and adjusting for realized or unrealized gains on the investments, the core non-interest income grew by 23.4 per cent year-on-year (YoY). December quarter was second successive quarter of less than 1 per cent QoQ (quarter-on-quarter) increase in the Opex. Operating expenses were at Rs 2,347 crore, up 10.6 per cent YoY and only 0.6 per cent QoQ."

In terms of profitability, the private lender's chief mentioned that Q3 FY24 net profit at Rs 231 crore was up by 349 per cent YoY and 2.8 per cent QoQ.

Technical analysts largely suggested that immediate support on the counter could be seen around Rs 25. On the higher side, a decisive breach above Rs 32 is required for next potential upside targets of Rs 35 and Rs 44 levels.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "YES Bank has managed to sustain above the Rs 20-21 zone after a long time, which is a positive development for the stock. From a technical point of view, sustenance above the same is likely to augur well for stock prices to surge higher. Hence, it is advisable to have a pragmatic approach in the counter and keep the trailing support zone (stop loss) on the higher front with the stock movement."

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "The stock has witnessed a decent rally. We expect the stock to rise till the initial target of Rs 32 and thereafter with strength sustaining can achieve next targets of Rs 35 and Rs 44 levels, respectively. The near-term support would be maintained near the Rs 22.60 zone."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 25. Expected trading range will be between Rs 22 and Rs 32 for a month."

AR Ramachandran from Tips2trades said, "YES Bank stock price looks bullish on daily charts with next resistance at Rs 30.6 in the near term. Support will be at 24.5."

The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 82.68. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 124.70 against a price-to-book (P/B) value of 21.96.

Separately, stock exchanges BSE and NSE have sought clarification from YES Bank on a news report titled "Yes Bank LeRemitt in pact to enable smooth cross border transactions for MSME."

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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