Yes Bank Shares Surge: A Noteworthy Turnaround

Yes Bank’s stock has recently experienced an impressive rebound, adding 1% during Tuesday’s trading session on April 22, bringing the share price to ₹19. This marks the fifth consecutive day of gains for the bank’s shares, resulting in a remarkable 11% increase over this period. The latest surge follows a substantial 4% jump in the previous trading day, which was its most significant rise since mid-January. Investors reacted positively to the bank’s Q4FY25 results, which surpassed market expectations.

A Welcome Change for Yes Bank Investors

The recent rise in Yes Bank’s stock price has been a breath of fresh air for shareholders who endured a prolonged downturn, with the stock declining for eight consecutive months between August 2024 and March 2025, losing a staggering 37% in value. However, April has seen a revival, with the stock increasing nearly 12%, marking its most substantial monthly gain since July 2024.

Strong Financial Performance

In its Q4FY24 report, Yes Bank announced a net profit of ₹738.1 crore, reflecting a robust 63.3% year-over-year increase from ₹451.9 crore during the same quarter last year. Notably, the bank has shown considerable improvement in its asset quality, with the Gross Non-Performing Asset (GNPA) ratio declining to 1.6%, Net Non-Performing Asset (NNPA) ratio to 0.3%, and a Provision Coverage Ratio (PCR) of 79.7% for the quarter ending March 2025.

Positive Trends in Asset Quality

• Decrease in Non-Performing Assets (NPAs): NPAs fell to ₹800.1 crore, down from ₹1,142.62 crore in the previous quarter.
• Gross NPAs: Recorded at ₹3,935.6 crore, slightly lower than ₹3,963.47 crore.
• Provisions: Amounted to ₹318.1 crore, a decrease from ₹470.9 crore year-on-year, but higher than ₹258.7 crore in the prior quarter.

Technical Analysis of Yes Bank Shares

Anshul Jain, who leads research at Lakshmishree Investment and Securities, has noted that Yes Bank’s shares have broken through previous lower highs and swing highs at ₹18.42 with a notable gap-up move. This suggests a potential momentum shift. He advises that pullbacks to this level could present attractive buying opportunities for both scalpers and momentum traders. Immediate price targets are set at ₹19.5 and ₹21, although he warns that current trading volumes lack strong bullish conviction, indicating a riskier trading environment.

Valuation Concerns from Kotak

Despite the positive trends, Kotak Institutional Equities has maintained a ‘Sell’ rating on Yes Bank shares, setting a target price of ₹17. They argue that the stock appears overvalued in light of current interest rate expectations, which may impact the bank’s near-term Net Interest Margin (NIM). While they anticipate gradual improvement in return ratios, they believe that investors may find more favorable opportunities elsewhere.

Kotak stated, "We find the risk-reward proposition to be better elsewhere. The valuations do not align with the current return ratios that the bank is delivering, and we see more attractive alternatives in the market."

In Conclusion

Yes Bank’s recent performance showcases a significant turnaround, providing hope for investors after a prolonged period of decline. With improving financial metrics and a potential shift in market momentum, eyes will be on how the stock continues to perform in the coming weeks. For those interested in banking stocks, Yes Bank presents a compelling case, albeit with caution advised due to varying market opinions on its valuation.