Is Yes Bank Stock Good to Invest in 2021?
Investing in financial stocks can be a risky endeavor, and Yes Bank is no exception. This article delves into what makes Yes Bank's stock a potentially good or bad investment in 2021. We will explore various aspects and expert opinions to help you make an informed decision.
Yes Bank's Financial Performance in Q3 2022
Yes Bank has shown promising results in its third quarter of fiscal year 2022, with a notable decrease in non-performing assets (NPA). However, it is imperative to continue monitoring quarterly performance as any upswings or improvements need to be consistent for long-term investment.
Disclaimer: This content is not intended as investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions.
Why Not Invest in Yes Bank Stock?
Final Answer: "No." Many experts believe that Yes Bank stock is neither fundamentally nor technically a worthwhile investment at the moment. The ongoing uncertainty and the impact of economic factors like Omicron could keep dragging the market down, suggesting it might be better to invest in quality stocks during dips.
Investing in fundamentally strong companies is the way forward, as it can lead to significant returns over the long term. I believe that holding onto value stocks during market fluctuations can yield better results in the long run.
Financial Advice: Always consult a SEBI registered financial advisor before making any investment decisions.
Opportunities with Yes Bank
While one word answer is "No," there are some unique opportunities worth considering for those who are prepared to invest in Yes Bank.
Is Yes Bank a Great Contra Stock Investment? Yes Bank has been identified as a potential contra stock investment, particularly at a price of 13 rupees per share. The rationale behind this is the belief that Yes Bank will see significant improvements in its financial performance over the next few years, leading to better stock performance.
Key Positive Aspects of Yes Bank
1. Technology Adoption and Service Excellence: Yes Bank is recognized as a strong technology-driven institution with excellent IT infrastructure. This includes great internet banking services for both individual and SME customers, full range of banking products, and a market leader position in UPI.
2. Dealing with NPA/SCandal Conclusion: The NPA scandal involving the Rana Kapoor family is expected to reach a conclusion by March 2022. With a minority stake in a newly established Asset Reconstruction Company (ARC), Yes Bank will be better positioned to manage NPA accounts, thus improving its balance sheet.
3. Improvement in CASA Deposits: There is a growing trend of clients returning to Yes Bank due to enhanced service quality. This shift in customer sentiment bodes well for the bank, especially within the context of public sector banks being perceived as subpar in terms of customer support.
4. Strong Leadership: Under the leadership of Mr. Prashant Kumar, MD/CEO, Yes Bank is actively working to resolve the issues faced during the reconstruction period. The bank has taken proactive measures to ensure accountability and has placed fear into defaulters, indicating a robust governance structure.
5. Employee Commitment: The employees at Yes Bank are highly motivated to restore the bank to its former glory, driven by a strong sense of purpose and a desire to achieve success.
6. Government Support: The bank received substantial backing from the Government of India (GOI) during its difficult period. Similar to the situation with Satyam Computers, where the GOI intervention led to a successful turnaround, Yes Bank's rehabilitation is being actively supported by the authorities.
Conclusion
Despite the potential upside, investors must weigh the risks and benefits carefully. Investing in Yes Bank stock should be considered a long-term commitment, requiring at least a 3-5 year horizon to see the fruits of the bank's improvements. Whether the stock is a good investment ultimately depends on one's risk tolerance and investment strategy.