YESBANK - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 3.2

📊 Fundamental Analysis

Valuation

P/E Ratio: 24.4 vs Industry PE of 12.6 — moderately overvalued relative to peers.

PEG Ratio: 0.79 — attractive, suggesting decent earnings growth relative to valuation.

Price to Book: ~1.36 — fair, but not compelling given low profitability.

Profitability

ROCE: 6.34% and ROE: 5.38% — weak, indicating suboptimal capital efficiency.

EPS: ₹0.86 — low earnings base.

Quarterly PAT Growth: +59.4% — strong momentum, but sustainability is uncertain.

Dividend Yield: 0.00% — no income generation.

Debt to Equity: 7.04 — extremely high, typical for banks but still a risk factor.

📈 Technical & Trend Indicators

DMA 50 / DMA 200: ₹19.9 / ₹19.8 — current price is above both, indicating short-term bullish momentum.

RSI: 67.5 — approaching overbought territory, caution advised.

MACD: 0.47 — mildly bullish crossover.

Volume: Strong — confirms active market interest.

52W Index: Trading at ~68% of its 52-week high — decent recovery, but not yet at breakout levels.

💡 Ideal Entry Price Zone

Entry Zone: ₹18.5–₹20.0**

This range offers proximity to moving average support and better valuation comfort.

Avoid entering above ₹22 unless ROE improves and debt metrics stabilize.

🧭 Exit Strategy & Holding Period

If you already hold YESBANK

Holding Period: 1–3 years — speculative recovery play, not ideal for long-term compounding.

Exit Strategy

Fundamental Trigger: Exit if ROE remains below 6% or debt-to-equity ratio worsens.

Technical Trigger: Consider trimming if price nears ₹23–₹24 without earnings support.

Re-entry Zone: ₹17–₹18 with signs of improving profitability and volume support.

🧠 Final Verdict

YESBANK is a high-risk turnaround candidate with improving earnings but weak profitability and high leverage. While short-term momentum is favorable, long-term conviction requires sustained ROE improvement and balance sheet repair. Best suited for tactical investors with a close eye on quarterly performance.

Let me know if you'd like a comparison with other mid-tier banks or a sector outlook.

Edit in a page