YESBANK - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 2.7

🏦 Fundamental Analysis of YES Bank Ltd (YESBANK)

(Private sector bank undergoing restructuring and recovery post-crisis)

✅ Positives

Improving Profitability

PAT Qtr: ₹809 Cr vs Prev Qtr: ₹745 Cr — strong quarterly growth

Qtr Profit Var: +56.7% — signs of operational recovery

EPS: ₹0.87 — still low, but improving

Valuation Support

PEG Ratio: 0.70 — suggests earnings growth is not overpriced

Price: ₹19.4 vs Book Value: ₹15.3 — ~1.27x book, reasonable for a recovering bank

P/E: 22.2 vs Industry PE: 12.6 — slightly expensive, but reflects turnaround expectations

Technical Setup

RSI: 37.9 — nearing oversold zone, potential for bounce

MACD: -0.16 — mild bearish, but flattening

Volume remains high — strong market interest

⚠️ Concerns

Weak Profitability Metrics

ROCE: 6.36%, ROE: 5.46% — below ideal for financials

Dividend Yield: 0.00% — no shareholder payouts yet

High Leverage

Debt-to-Equity: 7.45 — typical for banks, but still high

Needs strong asset quality and provisioning discipline

Sentiment Risks

FII Hold ↓ 1.93% — foreign investors exiting

52W Index: 30.2% — significant drawdown from highs

Price below DMA 50 & 200 — weak short-term trend

📉 Ideal Entry Price Zone

Entry Zone: ₹17.0–₹18.5

Near support and oversold levels

Offers better margin of safety for speculative recovery play

🧭 Long-Term Investment Outlook

YES Bank is a high-risk, high-reward turnaround story. While profitability is improving, core metrics like ROE and asset quality remain weak. Suitable only for aggressive investors willing to bet on restructuring success and sector tailwinds.

Holding Period: 2–3 years

Reassess if ROE crosses 10% and EPS grows consistently

Watch for NPA trends, credit growth, and regulatory actions

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹22–₹25

If price rebounds on sentiment or earnings surprise

Full Exit

If ROE remains <6% and EPS stagnates

If price breaks below ₹17 and fails to recover

If FII/DII interest continues to decline

Reinvest: Only if ROE improves to >10% and dividend reinstated

Would you like a comparison with other mid-tier banks like IDFC First Bank, RBL Bank, or Bandhan Bank to evaluate safer alternatives or similar turnaround plays?

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