The View for Yes Bank as a Stock: Recent Performances and Future Perspectives

Yes Bank, one of the leading banks in the Indian market, has recently witnessed a resurgence in interest among retail investors. Despite a challenging past, the company has shown signs of improvement, drawing attention back to its potential. Here, we delve into the latest developments and future outlook for Yes Bank.

Current Stock Performance and Investor Confidence

The last two days have seen a significant surge in Yes Bank's stock performance, a trend that has rekindled hope among investors. Several positive factors contribute to this renewed confidence:

Improvement in Current Accounts and Savings Accounts (CASA): Yes Bank has seen a robust growth in its CASA, with an increase of 51.8% to Rs 42,587 crore in FY21 from Rs 28,063 crore in FY20. This growth is pivotal as it signifies an improvement in customer loyalty and the bank's ability to retain deposits. Net Interest Income (NII): A significant YoY growth of 9% in NII, owed to interest reversals ordered by the Supreme Court, adds a positive veneer to the bank's immediate future prospects. Loan Book Diversification: Despite the pandemic, Yes Bank has managed to see a 23% increase in retail loans. The current loan book composition stands at 51% MSME and Retail advances, with only a small percentage of Non-Performing Assets (NPAs). This diversification strengthens the bank's financial position. Fee Income from Retail Sector: Q4FY21 witnessed the highest-ever fee income from the retail sector, amounting to Rs 421 crore, reflecting the bank's successful fee-generating initiatives.

Financial Health and Future Prognosis

While this recent performance is promising, it is crucial to assess Yes Bank's financial health more comprehensively to gauge its potential for a sustained turnaround.

From a historical perspective, Yes Bank has a mixed record. Prior to 2018, the company demonstrated consistent growth in revenue, with the revenue almost doubling annually. However, subsequent years saw a downturn, leading to losses and significant stock depreciation. Recent quarterly earnings have shown a positive trend, with regular growth in Earnings Per Share (EPS) and increased institutional holdings. Specifically, the number of funds investing in Yes Bank has risen by 2.29, and the shares held by these institutions have grown by 25%.

Additionally, the Return on Equity (ROE) of Yes Bank has turned positive this year, marking a promising shift. Moreover, the company has achieved quarterly sales surpassing 6,000 crore for the first time in Q3 and Q4 of 2022/2023.

Despite these improvements, it is premature to declare a definitive turnaround. Analysts recommend a wait-and-see approach, especially considering the upcoming quarterly results. Investors should also consult financial advisors before making any investment decisions.

Conclusion

The recent developments in Yes Bank showcase a positive trajectory. While the past has been challenging, the company's recent financial performances and improved stakeholder confidence paint a hopeful picture. However, a cautious approach is advised until more definitive evidence of sustained growth is confirmed.

Thank You for Reading.

Happy Investing.