yes bank share price: Yes Bank at Rs 11 or Rs 30? Here’s the outlook for stocks after a 50% rally in two months
Shares of Yes Bank soared around 48% from Rs 12.3 on June 20 to hit a new 52-week high of Rs 18.30 on Friday September 9. However, the stock was trading between Rs 17.5 and 18 levels on Monday.
Market analysts remain divided on the future of private lenders and suggest the stock only to investors with a high long-term risk appetite with a word of caution.
Kranthi Bathini, equity strategist at WealthMills Securities, said Yes Bank has been attracting investor interest lately amid buzz around its board reshuffling, fundraising plans and improved performance in recent quarters.
“The lender’s recovery is entirely dependent on its performance over the next quarter, in terms of growth in the personal and commercial loan book, as well as non-performing assets,” he added. “Don’t expect immediate fireworks from the counter.”
Aditya Puri, former MD of
and senior adviser to the Carlyle Group, would gain a seat on the board of Yes Bank on behalf of the private equity firm.
Prashanth Tapse, research analyst at Mehta Equities, believes the bank is rebuilding its brand as well as its business momentum with the help of two high caliber private investors, Advent and Carlyle.
Market experts expect the two investors to bring vast experience and expertise in the financial field to hold Yes Bank for its next growth journey. Yes Bank is likely to approve and transfer stressed assets to private equity firm JC Flowers.
“If this deal materializes on the terms expected, Yes Bank will likely exit stressed toxic assets and reduce balance sheet pressure, which was once a systemic risk to the bank,” Tapse added.
However, even technical analysts remain divided on the counter. Those seeing bullish trends see a rise up to Rs 30 over the next two quarters, while others believe the stock may retest its 52-week lows at Rs 10.93.
“If stock prices close above the levels of Rs 19.50 on a weekly closing basis, then the stock may see a short-term target of Rs 22, while the long-term target may be Rs 28-30 for a time horizon of 6-12 months,” said Tapse, who has a stop loss of Rs 15.20.
Reading the technical charts, Kush Ghodasara, CMT, and an independent market expert said that Yes Bank recently took a step forward on the likely nod to the stake sale, but the move can be seen as an opportunity to make profits.
“Given the growing capital base, it is very difficult for banks to perform fundamentally at higher EPS,” he added. “Technically, the stock has a trailing stop loss at Rs 16.95 below which it can test Rs 11.”
Wealthmills’ Bathini suggested that existing investors can continue to hold the shares with a long-term view, but new entry at current levels should be avoided. “The title works miracles in the short term,” he adds.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)