Why Yes Bank Share Price is Skyrocketing Today - Explained

Yes Bank’s share price experienced a significant surge of over 9% on Friday, driven by heavy trading volumes. The shares reached an intraday high of ₹26.28 on the BSE, marking a 9.68% increase from the previous close.

Historically, Yes Bank has faced numerous challenges, including a severe liquidity crisis in 2020 that led to a restructuring plan orchestrated by the Reserve Bank of India (RBI). The bank’s revival efforts have been closely monitored by investors and analysts alike.

On July 5, the trading volume of Yes Bank shares soared, with approximately 51 crore shares changing hands, compared to the average weekly volume of 15 crore shares. This surge in trading activity is seen as a technical indicator of a potential breakout.

Technical Analysis and Market Sentiment

Analysts suggest that Yes Bank’s stock has recently broken out of a daily trendline, accompanied by a significant increase in trading volume. This breakout indicates a potential for further rally. If the stock price closes above ₹27, it could reach short-term targets of ₹34. Immediate support levels are identified at ₹24 and ₹23, presenting buying opportunities on dips.

The Relative Strength Index (RSI) is currently at 75, indicating strong buying momentum. To manage risk, analysts recommend setting a stop-loss at ₹21.5.

Quarterly Business Update

In its quarterly business update on July 2, Yes Bank reported a 0.9% growth in loans and advances to ₹2.30 lakh crore for the quarter ending June 2024, compared to ₹2.28 lakh crore in the previous quarter. Year-over-year, loans and advances grew by 14.8% from ₹2.00 lakh crore.

Deposits for Q1FY24 fell marginally by 0.5% quarter-over-quarter to ₹2.65 lakh crore but rose 20.8% year-over-year. The CASA ratio stood at 30.7% for the April-June quarter, slightly down from 30.9% in the previous quarter but up from 29.4% a year ago. The Liquidity Coverage Ratio (LCR) improved to 137.8% from 116.1% quarter-over-quarter and 127% year-over-year.

Upcoming Financial Results

Yes Bank is set to announce its Q1 results on Saturday, July 20, 2024. The bank’s share price has been on an upward trajectory, gaining 11% in one week, over 16% in one month, 23% year-to-date, and more than 53% in the past year.

Financial Projections

For the first quarter of FY25, Yes Bank is expected to report a 7.1% year-over-year growth in net interest income (NII) and a 31.9% increase in net profit. Loan growth is projected to be healthy at 15% year-over-year but flat quarter-over-quarter, offset by rising costs of funds. The net interest margin is expected to decline to 2.3%, according to Kotak Institutional Equities.

Yes Bank has slowed its growth in unsecured loans due to rising delinquency rates. However, deposit growth remains strong at around 21% year-over-year, outpacing loan growth.

At 2:05 pm, Yes Bank shares were trading 9.02% higher at ₹26.12 on the BSE.

Summary

• Yes Bank shares surged over 9% on heavy trading volumes.
• The stock shows potential for further rally, with a target of ₹34 if it closes above ₹27.
• Quarterly business update shows 0.9% growth in loans and advances, and 20.8% YoY increase in deposits.
• CASA ratio and Liquidity Coverage Ratio have improved.
• Q1 results to be announced on July 20, 2024.
• Projected 7.1% YoY growth in NII and 31.9% increase in net profit for Q1 FY25.
• Yes Bank shares have gained 11% in one week, 16% in one month, 23% YTD, and 53% in the past year.