Shares of YES Bank, the country's fourth-largest private lender, continued their losing streak on Thursday and tumbled over 4 per cent intra-day trade to hit five-year low of Rs 95.25 on the Bombay Stock Exchange.
In the last one month, YES Bank share price has declined nearly 40 per cent after global rating agencies such as UBS India and Moody's Investors Service downgraded the bank's ratings. During the same period, Indian benchmark index S&P BSE Sensex declined nearly 1 per cent.
Extending its previous session losses, YES Bank share price declined as much as 4.55 per cent to hit an intra-day low of Rs 95.25. Paring some of the losses, the scrip closed trade at Rs 96.25, down 3.56 per cent. It was the worst hit among front-line stocks on the BSE. The stock also saw spurt in volume trade with 69.58 lakh shares that changed hands over the counter as compared to two-week average of 60.98 lakh shares on the BSE.
In a similar trend, stock of YES Bank ended 3.06 per cent lower at Rs 96.70 on the National Stock Exchange. The scrip hit a 52-week low of Rs 95.20 during the day's trade after opening higher at Rs 101.
Following the March quarter results, several brokerage firms including Citigroup, Macquarie, HSBC, and Morgan Stanley have either maintained a "sell" rating on the stock or remain "underweight."
In March quarter, YES Bank reported a net loss of Rs 1,506.64 crore as against a net profit of Rs 1,179.44 crore during the year ago period, due to rise in provisioning for bad loans. On the asset quality front, gross non-performing assets (NPAs) of the bank doubled to 3.22 per cent of the gross advances as on March 31, 2019, from 1.28 per cent at the end of 2017-18.
Last month, UBS India cut the target price of YES Bank's shares to Rs 90 from Rs 170, citing weak earnings going ahead. The agency expects 255/200 basis points credit cost in fiscal 2020-21, higher than the bank management's guidance of 125 basis points.
"We estimate revenue growth will be below 10 per cent in next two years as the business model shifts away from a high upfront fee business. We expect fee income to decelerate and margins to narrow sharply in FY20-21. Higher NPL formation and a shift towards low-yield business are likely to impact fee/margins adversely," UBS said in its report.
Global brokerage firm Moody's Investors Service placed YES Bank's foreign currency issuer rating of Ba1 under review for downgrade, citing the private lender's sizeable exposure to finance companies. According to the agency, the ongoing liquidity pressures on Indian finance companies will negatively impact the credit profile of YES Bank, given the bank's sizeable exposure to weaker companies in the sector.
Edited by Chitranjan Kumar