11% returns in 1 day! Yes Bank share price soars even as markets tumble - Where is the stock headed? Find out!

While domestic benchmark indices like Sensex and Nifty were facing major selling pressure from investors, on the other hand, it was a treat to watch Yes Bank share price. Despite posting a whopping 91% yoy drop in Q1FY20 PAT, with higher provisions and stressed assets, Yes Bank was still the most-bought share on Dalal Street! Yes Bank share price was very much on fire today! So much so that it even clocked an intraday high of Rs 92.40 per piece during Monday’s trading session. That would be a huge 11% return alone in 1 day, making many investors very rich indeed. Yes Bank share price finally closed at Rs 91.15 per piece, up by 9.49% or Rs 7.90 on Sensex. 

Where is Yes Bank share price headed? 

Neelam Bhatia, Research Analyst at IDBI Capital said that, the bank is in repair mode and is trying its best to give an optimistic guidance. Though management is talking about capital raising in Q2FY20, the quantum, mode, interested investors and the dilution involved remain important moniterables. With a probability of its watchlist turning into NPAs and lower balance sheet growth, it made them cautious on the turnaround strategy of the bank.

Majority of experts have given Hold to Add rating on Yes Bank shares, with a few recommending to buy the stock! 

While, Sohail Halai analyst at Antique Stock Broking said, “YES Bank's reported yet another weak quarter on asset quality with gross slippages of INR62bn and NNPL increase of 50% QoQ. High net slippages from outside the watch-list (INR20bn+, though these exposure were included in BB and below rated pool) and consequent sharp increase in BB and below rated pool to INR295bn (9.4% of the exposure vs. INR220bn in 4Q) disappointed. YES maintained its credit cost guidance of 125bps for FY20, but this excluded investment related provisions of INR11bn (20-30% provided) on two NBFCs. Hence, with sharp increase in stress pool and exclusion of investment related provisions, comfort on guidance is low.”

Halai added, “ With CET 1 of 8%, equity infusion at current stage become important and would provide room for absorption of credit risk. Thus, bank's performance becomes highly contingent to resolution of some of these large exposures to promoter group entities/corporate deleveraging and capital support. Therefore, despite significant correction in the stock price and low valuation of 0.8x FY20BV we believe uncertainties are high and put our rating Under Review.”

On the other hand, Deepak Kumar Research Analyst at Narnolia Financial Advisors said, “View and Valuation Increase in BB & Below book at 9.4% (Rs 29400 Cr) signals continued profitability pressure for YES Bank going ahead. Transitions in top level management team is largely over. CET 1 capital is low at 8% and management plans to raise the capital in next quarter. We believe the profitability will continue to remain under pressure in near to midterm but any substantial resolution in NPA accounts will provide upside. Stock is currently trading at discount value factoring the higher stress level of the bank. While capital raising plan is on board, we wait for the execution before changes in our view. We maintain NEUTRAL on the stock with the target price of Rs 107 at 0.9x BV FY20e.”

In Shivaji Thapliyal, Research Analyst at Nirmal Bang has given a buy rating on the stock. Adding he said, “We have revised our estimates for FY20/FY21 and retained Buy rating on YBL, revising our target price to Rs113 (from Rs111 earlier) and valuing the stock at 0.8x FY21E P/BV.”

From the highest target price on Yes Bank, the lender’s share has a potential to rise further by nearly 24%.