Yes Bank, established in 2004, has navigated a dynamic journey in the Indian banking sector. Headquartered in Mumbai and listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), the bank offers a comprehensive range of financial products and services to individuals, small and medium enterprises (SMEs), and large corporates. As of March 3, 2024, Yes Bank’s share price stands at Rs. 25.30, prompting investors to seek insights into its potential trajectory.
This analysis aims to shed light on anticipated share price targets for Yes Bank across a significant timeframe (2024-2030), equipping investors with valuable information for informed decision-making.
Table of Contents
Yes Bank Overview
Historical Perspective
Yes Bank commenced operations in 2004 led by its founder Rana Kapoor and received banking license from the Reserve Bank of India (RBI) in 2003. It attracted investors by its high growth strategy and grew its balance sheet multi-fold between FY2005-FY2019, funded primarily by wholesale deposits and certificate of deposits. However, lack of proper due diligence in credit appraisal and concentration risks led to rising bad loans from FY2018.
In September 2018, the RBI denied the re-appointment of Rana Kapoor as CEO due to concerns over governance and weak internal controls. Ravneet Gill took over in March 2019 and shifted focus to retail assets. But the problems amplified – the bank reported huge losses in FY2019 and FY2020 due to heavy provisioning requirements. In March 2020, Yes bank was put under a moratorium by RBI due to a liquidity crisis. A reconstruction scheme was launched – SBI and other private banks invested capital, asset quality improved, and the bank returned to profits in FY2022.
Financial Indicators
- Market Cap: ₹ 71,627.57 Cr.
- CASA Ratio: 30.76%
- P/E: 71.51
- P/B: 1.76
- Face Value: ₹ 2
- Dividend Yield: 0%
- Book Value (TTM): ₹ 14.16
- Net Interest Income: ₹ 7,917.57 Cr.
- Cost to Income Ratio: 73.13%
- Promoter Holding: 0%
- EPS (TTM): ₹ 0.35
- CAR: 17.9%
- ROE: 1.95%
- ROCE: 5.03%
- Profit Growth: -32.71%
yes bank share price historical movement
Recent Developments
- Yes Bank reported a over 4-fold jump in Q3 (Quarter 3) consolidated net profit on January 29, 2024.
- The bank launched SmartFin, a new product offering, on January 15, 2024.
- Yes Bank reported a 43% rise in Q2 consolidated net profit on October 23, 2023
Banking Sector Overview
Yes Bank’s Market Position
Yes Bank is the sixth largest private sector bank in India with a loan book size of ₹1.8 lakh crore as of March 2022. It accounts for a 4% market share in Indian banking currently. ICICI Bank, HDFC Bank and Axis Bank are the leaders in the private banking space. Yes Bank has a limited presence in the retail and MSME sectors with just 18% of its loan book in retail. Its corporate segment lending stands at 43% currently.
In deposits, Yes Bank has a market share of less than 1%. It relies heavily on bulk deposits and has a low CASA ratio of 31% versus 40-50% for leading peers. However, in digital banking, Yes Bank has shown good progress. Its internet and mobile banking transaction share was 84% in FY2022.
Regulatory Impact
The RBI and government regulations have significantly impacted Yes Bank’s business. The RBI put Yes Bank under moratorium in March 2020 and imposed restrictions on withdrawals due to a crisis triggered by mounting bad loans. The RBI and government facilitated its revival by asking leading banks to infuse new capital. Post this bailout, the RBI and government nominees were added to its board.
Going forward, regulations around bad loan recognition, higher provisioning requirements, and maintaining capital buffers will remain a key monitorable. Any adverse regulatory directive can impact Yes Bank’s progress and shareholder value.
Yes Bank Share Price Analysis
Current Share Price Trends
Yes Bank’s current share price is ₹24.95, which is down 1.39% from the previous day’s closing price. Despite the daily dip, the stock has gained 73.26% from its 52-week low of ₹14.40.
Key factors impacting current share price trends:
Positive:
- Recent price performance: Up 73% from 52-week low, indicating a potential turnaround.
- Financial improvement: Strong growth in Net Interest Income (NII) and double-digit growth in loan book and deposits in FY23.
- Reduced Non-Performing Assets (NPAs): NPA ratio significantly decreased compared to previous years.
Negative:
- Short-term profitability: Profitability metrics like net profit and operating profit growth show room for improvement.
- Technical indicators: Most technical indicators are neutral or bearish, suggesting short-term weakness.
- Trading below key moving averages: Price is below its 50-day and 20-day moving averages, indicating a possible downtrend
Technical Analysis
Overall: The technical indicators for Yes Bank are sending mixed signals.
Positive signs:
- Price: Yes Bank has gained significantly from its 52-week low (72.92% gain).
- Delivery Volume: The delivery volume is above average for the week and month, indicating buying pressure.
- Moving Averages: The price is above the 19.41 and 200-day SMAs, which can be seen as a bullish sign.
- RSI and MFI: Both RSI and MFI are in the mid-range, not indicating overbought or oversold territory.
Negative signs:
- Trendlyne Momentum Score: The score is 54.21, indicating a neutral technical position.
- MACD: The MACD is below its signal line and center line, indicating a bearish signal.
- Oscillators: Five out of nine oscillators are in the bearish zone, suggesting potential downside pressure.
- Price: The price is currently trading below its 50-day SMA and its support level (S1).
Indicators:
- RSI (Relative Strength Index): 47.8 (neutral)
- MFI (Money Flow Index): 48.1 (neutral)
- MACD (Moving Average Convergence Divergence): -0.1 (bearish)
- Beta: 1.47 (1 year) – The stock is 1.47 times more volatile than the Nifty 50 index.
Recent Performance:
- Up 73.26% from its 52-week low.
- Down 1.19% today.
- Down 4.77% in the past week.
Support and Resistance:
- Current price: ₹24.95
- Support 1 (S1): ₹24.95 (current price)
- Resistance 1 (R1): ₹25.45
Shareholding Structure of Yes Bank
| Investor Type | Percentage |
|---|---|
| Promoters | 0.00 |
| Domestic institutional investors | 42.20 |
| Foreign Institutional Investors | 25.26 |
| Public & Other | 30.46 |
| Corporate Holding | 2.08 |
Annual Results and Financial Performance
In-Depth Analysis of Recent Annual Results
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Profit & Loss (Cr.) | |||
| Interest Earned | 6,984.85 | 6,216.24 | 12.38% |
| Other Income | 1,194.60 | 1,082.27 | 10.22% |
| Interest Expended | 4,967.97 | 4,110.92 | 20.83% |
| Operating Expenses | 2,347.43 | 2,298.69 | 2.15% |
| Total Provisions | 554.74 | 617.56 | -10.14% |
| Profit Before Tax | 309.31 | 271.34 | 14.00% |
| Tax | 77.85 | 68.91 | 12.91% |
| Net Profit | 231.46 | 202.43 | 14.34% |
| Net NPA (%) | 0.83 | 1.09 | -23.85% |
| NIM (%) | 2.64 | 2.69 | -1.86% |
| Capital Adequacy Ratio (CAR%) | 17.90 | 18.09 | -1.05% |
- Profit: Net profit increased significantly, jumping over 440% from ₹51.52 crore in 2022 to ₹231.46 crore in 2023.
- Deposits: Deposits grew by 10.3%, reaching ₹2,17,501.86 crore in 2023 compared to ₹1,97,061.86 crore in 2022.
- Advances: Advances grew by 12.3%, reaching ₹2,03,269.44 crore in 2023 compared to ₹1,809.60 crore in 2022.
- Cost-to-income ratio: This ratio remained high at 73.13%, indicating a significant portion of income is spent on operational expenses.
- Non-performing assets (NPAs): The gross NPA ratio improved to 2.00% in December 2023, showing a positive trend compared to 22.17% in December 2022. However, it’s important to monitor this ratio over time.
Evaluation of Financial Health and Stability
Strengths:
- Good Capital Adequacy Ratio: The bank has a Capital Adequacy Ratio (CAR) of 17.90%, which indicates a good buffer to absorb potential losses.
- Profit Growth: The bank has delivered a profit growth of 26.90% over the past 3 years.
Limitations:
- Low ROA: The bank has a very low Return on Assets (ROA) track record. The average ROA of the last 3 years is -0.24%.
- Low CASA Growth: The bank’s CASA (Current Account Saving Account) growth is -0.36% YoY, which is very low. CASA deposits are considered a stable source of funding for banks.
- Low ROE: The bank has a low Return on Equity (ROE) of -2.49% over the last 3 years. ROE measures the bank’s profitability relative to shareholder equity.
- High NPA: The bank has a high Non-Performing Assets (NPA) ratio. The average NPA of the last 3 years is 3.75%. NPAs are loans that are unlikely to be repaid.
- High Cost to Income Ratio: The bank has a high Cost to Income (CTI) ratio of 73.13%. The CTI ratio indicates how much a bank spends to generate each rupee of income.
- Poor Income Growth: The company has delivered poor income growth of -4.51% over the past 3 years.
Overall, Yes Bank’s financial health and stability appear to be improving, but there are still some areas of concern, such as the low ROA, low CASA growth, low ROE, high NPA, and high CTI ratio.
Yes Bank Share Price Target (2024 – 2030)
| Year | Share Price Target |
|---|---|
| 2024 | ₹22 – ₹35 |
| 2025 | ₹32 – ₹48 |
| 2026 | ₹40 – ₹65 |
| 2027 | ₹50 – ₹80 |
| 2028 | ₹60 – ₹100 |
| 2029 | ₹75 – ₹120 |
| 2030 | ₹90 – ₹150 |
- The target price of Rs. 32.85 is the 52-week high for YES Bank shares.
- Technical analysis suggests potential upside to Rs. 35.00 or downside to Rs. 25.00 in 2024.
- Analyst ratings and target prices are not available for years beyond 2024
Yes Bank Share Price Target 2024
In 2024, Yes Bank’s share price is projected to range between ₹22 and ₹35, reflecting the bank’s initial recovery phase. The optimistic scenario envisions loan book growth of 15-18%, driven by a strategic focus on retail and SME segments. This growth, coupled with a declining gross NPA ratio (2.5-3%) and a net NPA ratio around 1.2%, could contribute to improved asset quality.
The bank’s net interest margin (NIM) is expected to range between 2.7-2.9%, buoyed by a rising CASA (Current Account Savings Account) ratio. Cost-to-income ratios may remain elevated at 65-70%, reflecting ongoing restructuring efforts. Return on Assets (RoA) could improve to 0.8-1%, while Return on Equity (RoE) may reach 8-10%. Valuations could potentially re-rate to 1-1.2 times the price-to-book value (P/BV) as investor confidence gradually returns.
Yes Bank Share Price Target 2025
As the bank’s turnaround gains traction, Yes Bank’s share price target for 2025 is projected to range between ₹32 and ₹48. Loan growth could accelerate to 17-20%, driven by market share gains in targeted segments. Asset quality is expected to improve further, with gross NPAs potentially falling below 2.5% and net NPAs below 1%.
The bank’s NIM may strengthen to 2.8-3.1%, supported by an improved liability mix and higher CASA ratios. Cost-to-income ratios could decline to 60-65% as operational efficiencies kick in. RoA and RoE could reach 1-1.2% and 10-12%, respectively. Valuations might re-rate towards 1.2-1.4 times P/BV as business fundamentals continue to strengthen.
Yes Bank Share Price Target 2026
In 2026, Yes Bank’s share price target is projected to range between ₹40 and ₹65. The bank’s loan book could grow at a compound annual growth rate (CAGR) of 18-22%, with a continued focus on secured retail assets. Asset quality metrics may improve further, with gross NPA ratios declining to 2-2.5% and net NPAs falling below 0.8%.
The NIM could reach 3-3.2%, driven by a higher CASA mix and improved liability management. Cost-to-income ratios may fall to 55-60% as the bank realizes operational leverage benefits. RoA and RoE could improve to 1.2-1.4% and 12-14%, respectively. Valuations might command a premium of 1.4-1.6 times P/BV, reflecting the bank’s sustained recovery and improved profitability metrics.
Yes Bank Share Price Target 2027
By 2027, Yes Bank’s share price target could range between ₹50 and ₹80. The bank’s loan growth could accelerate to 18-24% across various segments, supported by diversification strategies. Asset quality may continue to improve, with gross NPAs potentially dropping below 2% and net NPAs below 0.6%.
The NIM could strengthen to 3.1-3.4%, underpinned by a robust CASA franchise. Cost-to-income ratios may fall below 55% as the bank realizes economies of scale. RoA and RoE could reach 1.4-1.6% and 14-16%, respectively. Valuations might re-rate to 1.6-1.8 times P/BV, reflecting the bank’s consistent performance, strong fee income, prudent capital management, and diversified revenue streams.
Yes Bank Share Price Target 2028
In 2028, Yes Bank’s share price target is projected to range between ₹60 and ₹100. The bank’s loan book CAGR could reach 19-25%, driven by growth across various segments. Asset quality may continue to improve, with gross NPAs potentially falling below 1.5% and net NPAs below 0.5%.
The NIM could strengthen to 3.2-3.6%, supported by a CASA ratio above 40%. Cost-to-income ratios may drop below 50% as digital capabilities drive operating leverage. RoA and RoE could reach 1.6-1.8% and 16-18%, respectively. Valuations might re-rate towards 1.8-2 times P/BV, positioning Yes Bank to command valuations at par with leading private sector peers.
Yes Bank Share Price Target 2029
In 2029, Yes Bank’s share price target could range between ₹75 and ₹120. The bank’s loan growth may accelerate to 20-26%, driven by diversified product offerings and geographic expansion. Asset quality metrics could continue to improve, with gross NPAs potentially dropping below 1% and net NPAs below 0.3%.
The NIM may strengthen to 3.4-3.8%, supported by a high CASA mix and stable margins. Cost-to-income ratios could fall below 45% as the bank realizes significant operational efficiencies. RoA and RoE could reach 1.8-2% and 18-20%, respectively. Valuations might re-rate towards 2-2.2 times P/BV, reflecting the bank’s industry-leading profitability metrics, stringent risk management, and robust capital buffer.
Yes Bank Share Price Target 2030
By 2030, Yes Bank’s share price target could range between ₹90 and ₹150. The bank’s loan book CAGR could reach 22-28%, driven by sustained leadership in digital banking, successful expansion into new markets and products, and a diversified portfolio.
Asset quality metrics may further improve, with gross NPAs potentially dropping below 0.8% and net NPAs below 0.2%. The NIM could exceed 3.5%, supported by stable margins and a strong CASA franchise. Cost-to-income ratios may fall below 40% as the bank realizes significant operational leverage.
RoA and RoE could exceed 2% and 20%, respectively, reflecting best-in-class profitability metrics. Valuations might re-rate towards 2.2-2.5 times P/BV, driven by the bank’s robust capital adequacy, risk management practices, and sustained delivery of industry-leading profitability ratios.
Comparative Analysis with Competitors
| Company | Price (Rs.) | Market Cap (Cr.) | P/E | P/B | EPS (Rs.) | ROE (%) | ROA (%) |
|---|---|---|---|---|---|---|---|
| Yes Bank | 24.90 | 71,627.57 | 71.51 | 1.76 | 0.35 | -2.49 | 0.21 |
| ICICI Bank | 1,088.35 | 7,63,933.79 | 3.43 | 19.44 | 55.99 | 17.53 | 2.13 |
| Kotak Mahindra Bank | 1,721.20 | 3,42,156.48 | 3.70 | 26.03 | 66.12 | 14.12 | 2.38 |
| Axis Bank | 1,100.05 | 3,39,423.26 | 2.37 | 28.28 | 38.90 | 7.98 | 0.77 |
| IndusInd Bank | 1,526.50 | 1,18,805.18 | 1.98 | 13.75 | 111.06 | 14.54 | 1.72 |
Yes Bank SWOT Analysis
Strengths:
- Good Capital Adequacy Ratio: Yes Bank maintains a healthy capital adequacy ratio (CAR) of 17.90%, indicating its ability to absorb potential losses and maintain financial stability.
- Profit Growth: The bank has shown good profit growth of 26.90% over the past 3 years, reflecting its potential for future expansion and profitability.
Weaknesses:
- Low ROA: Yes Bank has a concerningly low return on assets (ROA) track record, with an average of -0.24% over the past 3 years. This indicates the bank’s inefficiency in generating profits from its assets.
- Negative CASA Growth: The bank’s CASA (Current Account Savings Account) growth has been negative, standing at -0.36% YoY. This indicates a decline in low-cost deposits, which can put pressure on the bank’s profitability.
- Low ROE: The bank’s return on equity (ROE) is also negative, averaging -2.49% over the past 3 years. This suggests the bank is struggling to generate returns for its shareholders.
- High NPA: Yes Bank still faces a high level of non-performing assets (NPA) with an average of 3.75% over the past 3 years. This indicates a significant portion of its loans are not being repaid, impacting its profitability.
- High Cost-to-Income Ratio: The bank’s cost-to-income ratio is high at 73.13%, indicating its expenses are a significant portion of its income. This inefficiency can hinder its ability to generate profits.
Opportunities:
- Growth in Retail Banking: The Indian retail banking sector is expected to grow significantly in the coming years. Yes Bank can capitalize on this opportunity by expanding its retail banking offerings and customer base.
- Digital Transformation: Embracing digital transformation can improve operational efficiency, reduce costs, and enhance customer experience, giving Yes Bank a competitive edge.
- Strategic Partnerships: Collaborating with other financial institutions or fintech companies can help Yes Bank expand its reach and product offerings.
Threats:
- Competition: The Indian banking sector is highly competitive, with several established players and new entrants vying for market share. This can put pressure on Yes Bank’s profitability and growth prospects.
- Macroeconomic Factors: The bank’s performance can be impacted by various macroeconomic factors such as interest rate fluctuations, inflation, and economic growth.
- Regulatory Changes: Changes in regulations and compliance requirements can increase the bank’s operating costs and impact its business model.
Overall, Yes Bank faces several challenges, particularly regarding its low profitability and high NPAs. However, the bank also has opportunities for growth in the Indian retail banking sector. By addressing its weaknesses and capitalizing on its strengths and opportunities, Yes Bank can improve its financial performance and achieve sustainable growth.
Future Outlook and Investment Strategy
Market Sentiment and Expert Opinions
- The Yes Bank share price is currently ₹ 24.90, down -1.39% from the previous day.
- The stock has been volatile in recent months, with a 52-week high of ₹ 32.85 and a 52-week low of ₹ 14.40.
- Analyst opinions are mixed, with some analysts recommending a “sell” and others a “hold.”
Strengths:
- Good Capital Adequacy Ratio of 17.90%
- Delivered good Profit growth of 26.90% over the past 3 years
Limitations:
- Very low ROA track record (average of -0.24% over 3 years)
- Low CASA Growth of -0.36% YoY
- Low ROE of -2.49% over the last 3 years
- High NPA; average of 3.75% over the last 3 years
- High Cost to income ratio of 73.13%
- Delivered poor Income growth of -4.51% over the past 3 years
Expert Opinions:
Analysts’ opinions on Yes Bank are mixed. Some analysts are positive on the bank’s future prospects, citing its strong capital adequacy ratio and recent profit growth. However, other analysts are concerned about the bank’s low ROA, high NPA levels, and high cost-to-income ratio.
- ICRA: Maintains a stable outlook on Yes Bank, citing its improving asset quality and profitability.
- CARE: Assigns a ‘BBB-‘ rating to Yes Bank’s long-term debt instruments, indicating moderate credit quality.
- CRISIL: Maintains a ‘BBB-‘ rating on Yes Bank’s long-term debt instruments, indicating moderate credit quality
Growth Drivers and Challenges
Growth Drivers:
- Improving asset quality: Yes Bank has been focusing on improving its asset quality by reducing non-performing assets (NPAs). The bank’s gross NPA ratio has decreased from 22.17% in December 2022 to 10.83% in December 2023. This improvement is a positive sign for the bank’s future profitability.
- Focus on retail banking: Yes Bank is increasingly focusing on expanding its retail banking business, which is considered to be a more stable and profitable segment compared to corporate banking. The bank has been launching new products and services targeted towards retail customers, such as Yes SmartFin which is a digital neo-banking platform.
- Strategic partnerships: Yes Bank has entered into strategic partnerships with various companies to expand its reach and product offerings. For example, the bank has partnered with Accelerated Computing Enterprise to offer cloud-based solutions to its corporate customers.
- Government support: The Indian government has taken steps to support the banking sector, which could benefit Yes Bank. For example, the government has announced a scheme to provide liquidity support to public sector banks (PSBs).
Challenges:
- High cost-to-income ratio: Yes Bank’s cost-to-income ratio is still high at 73.13%, which means that the bank spends a large portion of its income on expenses. This ratio needs to come down for the bank to improve its profitability.
- Low return on equity (ROE): Yes Bank’s ROE is still negative at -2.49% for the last 3 years. This indicates that the bank is not generating enough profit from its shareholders’ equity.
- Macroeconomic headwinds: The Indian economy is facing some headwinds, such as rising inflation and interest rates. This could slow down loan growth and increase the risk of bad loans for Yes Bank.
- Competition: The Indian banking sector is highly competitive, with several large and well-established players. Yes Bank will need to continue to innovate and differentiate itself in order to compete effectively
Risk Management and Recommendations
Comprehensive Risk Evaluation
Key risks to Yes Bank’s share price performance and business growth are:
- Governance Risks: Any controversy or negative news-flow related to governance, transparency or management integrity poses downside risks. Shareholders should proactively monitor board structure, managerial performance, disclosures and compliance standards.
- Asset Quality Risks: Although improving, Yes Bank has sizable restructured assets. Any incremental slippages from these accounts can impact profitability and stock sentiment.
- Regulatory Risks: Given Yes Bank’s history, any adverse regulatory action such as restriction on operations poses downside risks. Compliance with RBI directives is paramount.
- Market Risks: Prolonged weakness in Indian economy or equity markets can dampen investor outlook. Share price volatility is likely to remain higher than mature private sector peers.
Investment Recommendations
- For long-term investors, Yes Bank can be accumulated in a phased manner at declines given low valuations and turnaround potential. But portfolio exposure should be limited to 2-3% given inherent volatility.
- Short-term traders should adopt a cautious approach. Buying on dips around support zones and selling on rallies towards resistance makes sense. Strict stop losses are suggested given price swings.
- High-risk appetite investors may consider opportunistic buys for potential multibagger returns but need to track management and regulatory developments closely.
Conclusion
In summary, while Yes Bank has made significant strides towards recovery following its bailout reconstruction, it still faces challenges around rebuilding franchise strength. Its financial and operational metrics have improved but lag leading private banks considerably. Long-term investors can consider limited exposure given deep valuation comfort. Strong execution delivering robust and sustainable growth in assets and profitability as well as transparency in governance will be key stock drivers going forward and require close tracking. Regulatory oversight of private banks may also have a bearing.
References and Citations
Financial Reports:
- Yes Bank Limited. (2023). Annual Report 2022-23. https://www.yesbank.in/about-us/investors-relation/financial-information/annual-reports
- Yes Bank Limited. (n.d.). Financial Information.
Analyst Reports:
- Equitymaster. (2023, July 17). YES BANK 2022-23 Annual Report Analysis. https://www.equitymaster.com/stock-research/financial-data/YES/YES-BANK-Detailed-Share-Analysis
- ICICIdirect. (n.d.). Yes Bank Ltd 19061 – Research and Analysis Report.
Disclaimer: This analysis of Yes Bank’s share price targets is for informational purposes only, not investment advice. I’m not a SEBI-authorized expert. Data and analysis are based on public info and AI tools, but may not be fully accurate or timely. Market conditions and company performance can change, leading to actual results differing from projections. Always do your own research and consult a qualified financial advisor before making any investment decisions