YES Bank’s share price jumped on Tuesday even as the bank reported the previous day that the Reserve Bank of India (RBI) had imposed a fine of ₹10,000 and ₹5,000 on the bank for not providing the exchange facilities for the mutilated notes to the public as per the extant RBI instructions and relating to cash handling training, respectively.
YES Bank’s share price has witnessed strong gains since November last year. On a monthly basis, YES Bank shares gained 21 percent in November and 11 percent in December. The stock has gained 21 percent in January so far.
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Analysts are positive about the bank’s prospects. Some of them expect the lender to report healthy December earnings.
YES Bank is due to report its December quarter earnings on Saturday, January 27th.
Brokerage firm Emkay Global expects YES Bank to report a 705.6 percent year-on-year (YoY) and 62.6 percent quarter-on-quarter (QoQ) jump in its Q3 net profit at ₹415.1 crores.
According to the brokerage firm, net interest income (NII), which is the difference between the interest earned and the interest paid, of YES Bank is expected to increase by 4.5 percent YoY and 5.3 percent QoQ to ₹2,059 crores.
The bank’s net interest margin (NIM) may dip 8bps YoY and rise 3 bps QoQ to 2.4 percent in Q3. Operating profit, however, may decline 6.6 percent YoY but rise 2.7 percent QoQ to ₹853.4 crore, Emkay said.
“We expect margins to remain largely flat, which coupled with some moderation in LLP should support profitability. Slippages are expected to moderate QoQ,” said Emkay.
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Recently, media reports cited the S&P Global Market Intelligence report which suggested that YES Bank saw the highest growth in market capitalization among Indian banks for the December quarter of the current financial year. The bank witnessed a significant 24.4 percent increase in market capitalization, reaching ₹61,694 crore during the December quarter. This helped YES Bank move two slots higher to the 14th position in the list of top 20 Indian banks by market cap.
Additionally, YES Bank claimed to have achieved the highest environmental, social and governance (ESG) score among Indian banks in the S&P Global Corporate Sustainability Assessment (CSA) 2023. The bank scored 73 (out of 100) in the 2023 S&P Global Corporate Sustainability. Rating, reflecting a considerable improvement of 5 points over its score of 68 in 2022.
More steam left?
While the stock is witnessing bullish momentum, technical analysts believe that the stock is poised to move higher soon.
According to Vaishali Parekh, vice president of technical research at Prabhudas Lilladher, the stock has rallied in the last two months winning with two instances of a higher low formation pattern on the daily chart. This has improved the bias and a further increase is expected with a decisive break above ₹23 confirmed so far.
“The next goals to be seen are ₹34 and ₹40 levels with strength continuing but at the same time, from current levels, only a decisive break below ₹22 should weaken the bias,” Parekh said.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers observed that recently this counter has given a clean break on the weekly time frame chart along with Stochastics reversing from the 70 zone which looks profitable at current levels.
“Investors/traders can enter lengths in the zone of ₹24-25 with an upper aim of ₹31 and stop loss of ₹21 every day,” said Patel.
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Published: 16 Jan 2024, 12:51 IST