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YES Bank share rises amid volatile market

BusinessToday.In     February 23, 2021

YES Bank shares gained almost 1 per cent in Tuesday's volatile session. Rising after 2 days of consecutive fall, YES Bank stock opened at its previous close of Rs 15.60 and rose 0.96 per cent to the intra-day high of Rs 15.75. The stock also touched a low of Rs 15.50 today.

YES Bank stock trades higher than 100-day moving averages but lower than 5, 20, 50 and 200-day moving averages.

The shares of the private lender have fallen 4 per cent in one week, 8 per cent in a month. Year-to-date, the stock is down 12 per cent and 55 per cent in one year.

Market capitalisation of the lender stood at Rs 39,210.93 crore. The stock has touched a 52-week high of Rs 87.95 and a 52-week low of Rs 5.55.

In terms of brokerage views, Emkay Research gave a 'Sell' rating to the stock and set a target price of Rs 11 for the share, given sub-par return ratios and unfavourable risk-reward with higher valuations.

"We believe that the transfer of NPAs to a separate ARC (somewhat similar to IDBI in 2003) probably means window dressing standalone bank B/sheet, but we need to see the extent of hair-cuts, structure of ARC and recovery record in the ARC, which is not inspiring in case of IDBI SASF," Emkay Research said in its report.

ICICI Securities said in a recent note that YES Bank's December-quarter earnings have aggravated fears of its asset quality issues and gave a 'Hold' rating on the stock with a revised price target of Rs 16.

"The portfolio vulnerability becomes visible from, a spike in standstill non-performing loans or NPLs (from 1.5 per cent to 5 per cent), SMA-2 pool (from 2.4 per cent to 4 per cent), SMA-1 (from 1.6 per cent to 7.3 per cent), and additional restructuring outside of this pool at 3.2 per cent over and above the labelled non-performing assets at 22 per cent," it added.

Brokerage houses Geojit and BNP Paribas, have a 'Sell' rating on the stock. Nirmal Bang continues to maintain a negative outlook on the bank. Elara Capital also recommends a 'Sell' rating on YES Bank with a target price of Rs 6.

Similarly, Anand Rathi has lowered the stock's rating to 'Sell' with a target price of Rs 14.

The free-fall in YES Bank's stock to double-digit figures was on the back of corporate governance lapses and under-reporting of NPAs. This led to the placement of the lender under a moratorium by the central bank last year. A consortium of lenders led by the country's largest lender- State Bank of India infused money into the bank to bail it out from deteriorating financial health.

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