YES Bank stock, fell for the sixth straight session today after the lender reported its June-Sept quarter earnings. YES Bank share price opened at Rs 12.41 and later hit intraday high of Rs 12.60. However, the stock erased gains and fell 1.6% to the intraday low of Rs 12.21 as against the earlier close of Rs 12.42 on BSE.
Share price of the private sector lender that exited from Nifty and Sensex has declined 7% in one week, 8% in one month and 73% since the beginning of the year. YES Bank stock is trading lower than 5, 20, 50, 100 and 200-day moving averages. Market capitalisation of the lender stood at Rs 30,667 crore as of today's session.
Last week, the lender posted a net profit of Rs 129.37 crore for the September quarter compared with a Rs 600.08 crore loss posted for the same period last year.
On a quarter-on-quarter (QoQ) basis, profit jumped 183% against Rs 45.44 crore in Q1 of current fiscal. Asset quality improved and amid a decline in provisions during September quarter of the current fiscal.
Sequentially, YES Bank's net interest income (NII) rose 3.4% to Rs 1,973 crore in Q2 from Rs 1,908 crore in the previous quarter. On a yearly basis, NII was down by 9.7% from Rs 2,186 crore.
Most analysts have 'sell' ratings on the scrip, trading in single digits this year. Shares of the private lender hit a 52-week high price of Rs 87.95 and a 52-week low of Rs 5.55.
"There are initial signs of recovery, but uncertainty around incremental corporate book stress, selling restrictions on private banks and management reshuffle preclude any meaningful assessment of business direction and residual net worth valuation," brokerage firm Edelweiss said in a note, keeping the stock "under review".
Emkay Research said in its note," We raise our earnings estimates primarily due to a better-than-expected growth trajectory, non-interest income and contained cost ratios. An RBI-initiated bailout backed from large banks and recent capital raising from the market reduced survival risk considerably, but it will have to navigate the Covid-19-led asset quality disruption and win back stakeholders' trust, it said.
ICICI Securities said, "The anticipated capital erosion risk at one go from unrecognised stress is scaled-down and deferred. However, given the challenging environment and the existing stress pool, credit cost will offset operating profit in the interim, thereby, suppressing earnings. Super-imposing potential medium-term return profile on valuation multiple of 1.1 times FY22 adj book suggests turnaround progress is fairly captured in valuations."
Brokerage house Nirmal Bang also kept a sell rating with a price target at Rs 12 on YES Bank and said that it expects the bank to report a loss for FY21, followed by a 0.5-0.7% RoA over FY22-23.
Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking said,"Yes Bank has filled preliminary business updated for Q2FY21. Advance grew 15.7% QoQ and declined 35% YoY. The major concern for the last few months was deposit stability. Deposit declined 35% YoY, however, sequentially increased 15.7%, which indicates SBI capital infusion yielded confidence to deposit holder and abated deposit outflow. YES Bank currently trades at 0.90x of trailing net worth. The investor would like to see the progress of the granular deposit base. Additionally, the fresh formation of bad loans due to low economic activity, would keep provision highs and return ratio compressed for a longer time. Overall banks would take a longer time to report decent RoE."
"While there was traction in deposits and loans sequentially, on a YoY basis the decline continues to be steep. YES Bank reported low slippage of 0.24% due to the SC order. Slippage would have been higher at 6% had it not been for the order. We estimate total collection efficiency of 70-77%, which is low, and a risk to future asset quality," Elara Capital said in a note.
Moreover, the stock was on a decline after news that Swaminathan Janakiraman, the nominee director appointed by State Bank of India, has resigned with effect from October 28, 2020.
"Accordingly, Swaminathan Janakiraman ceases to be a director of the bank with effect from the end of today, i.e. October 28, 2020," the lender said in its filing.