YES Bank shares at Rs 31! Here's why Anand Rathi sees a 32% upside in the stock

Analysts at Anand Rathi Shares & Stock Brokers have turned positive on YES Bank Ltd and the domestic brokerage firm believes that the private lender is likely to deliver a strong return of more than 30 per cent in the upcoming six months period purely on a technical basis.

YES bank is a full service commercial bank providing a complete range of products, services and digital offerings, catering to retail, MSME and corporate clients. It operates its investment banking, merchant banking and brokerage businesses. It also has a representative office in Abu Dhabi and an IFSC Banking Unit in Gujarat International Finance Tec-City (GIFT)

On Monday, Rating agency care ratings upgraded the rating for YES Bank's Infrastructure Bonds and Basel III Tier II Bonds to CARE A+/Stable, while it has re-affirmed the certificate of deposits (CoD) rating of the private lender as CARE A1+.

Recently, YES Bank exhibited a significant technical development by violating a bearish trendline on the daily chart, signaling a potential shift in its price action. After this violation, the stock entered a period of consolidation, during which it retested the broken trendline, said Jigar S Patel, Senior Manager - Technical Research Analyst, at Anand Rathi Shares and Stock Brokers.

Such a retest often indicates that the trendline, once a resistance, is now acting as support. YES Bank has reversed direction from this trendline in the past week, suggesting a possible end to the bearish phase. Furthermore, the stock has consistently respected the 200-DEMA high-low band, a critical dynamic support, which adds to the bullish sentiment, he said.

Shares of YES Bank settled at Rs 23.5 on Monday, rising nearly a per cent for the day. The total market capitalization of the lender stood near Rs 73,700 crore mark for the day. The target price of Anand Rathi suggests an upside potential of 32 per cent in the counter from its previous close.

"The Relative Strength Index (RSI) has also breached its bearish trendline, further strengthening the bullish outlook for the stock on the daily chart, Based on this confluence of technical signals, it is advised to take a long position in YES Bank within the price range of Rs 23-24, targeting an upside of Rs 31. A stop-loss should be placed at Rs 19.75 on a closing basis," Patel added.

Recently, The Reserve Bank of India (RBI) shunned Sumitomo Mitsui Banking Corporation (SMBC) plans to acquire a 51 per cent stake in YES Bank. Japan's SMBC has shown strong interest in acquiring a stake in Yes Bank but now talks have stalled and the stake sale in YES Bank is unlikely to happen in FY25, suggested some media reports.