YES Bank share price falls over 4% ahead of Q2 earnings

YES Bank share price saw profit booking in early trade today ahead of the announcement of lender's earnings for the quarter ended September 2019. YES Bank share price fell 4.61% to Rs 67.20 today compared to the previous close of Rs 70.45 on BSE. The large cap stock has lost 66.58% during last one year and fallen 62.53% since the beginning of this year.

Brokerages expect YES Bank to post a loss in Q2 due to various factors. Edelweiss Securities expects the bank to report a loss of Rs 1,907.30 crore over a profit of Rs 964.70 crore last year. The brokerage projected a 44 per cent fall in pre-provision operating profit (PPOP) in Q2.

Also read: Why YES Bank share price gained 35% in trade today

"We expect asset quality and credit cost to throw up negative surprises with higher than guided range. Also, deposits will witness QoQ dip of 8 per cent along with loan growth decline of 4-5 per cent. Fee income trend will be volatile and higher slippages will weigh on margins. This coupled with one-time DTA mark-down will lead to a loss in this quarter," Edelweiss said in a report.

Prabhudas Lilladher sees a 89 per cent year-on-year (YoY) decline in profit on 4.50 per cent and 20.20 per cent fall in net interest income and PPOP, respectively, in Q2FY20.

Morgan Stanley is underweight on YES Bank with a target price of Rs 55. It said capital raising of $1.2 bn  is positive for the lender and will limit downside for the stock. The brokerage expects gradual turnaround to limit upside. The funding of $1.2 billion would improve CET 1 ratio by 260 bps. At Rs 70 per share, fund raising would imply dilution of about 45%, it said.

The bank will hold a board meeting today to announce its Q2 earnings and consider fund raising plans. On Thursday, the bank said it has received a binding offer from a global investor for an investment of $1.2 billion through fresh issue of equity shares. The stock was the top gainer on both Sensex and Nifty.

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Subsequently, YES Bank share price closed 24% or 13.65 points higher at Rs 70.45 on BSE. On NSE,  the stock ended 23.77% higher at Rs 70.30. YES Bank share price zoomed 34.97% intra day to Rs 76.65 compared to the previous close of Rs 56.80 on BSE. On Nifty, YES Bank share price rose nearly 35% intra day to Rs 78.70 against previous close of Rs 56.80.

By Aseem