YES Bank shares tumbled 21% in six months; what's hurting the private lender's stock?

Shares of YES Bank Ltd on Wednesday resumed fall, pausing their two-day upward move after the private lender announced its second-quarter results. The stock shed 0.10 per cent to settle at Rs 20.73. At this price, it has corrected 20.79 per cent in past six months as compared to a 7.33 per cent rise in benchmark BSE Sensex during the same period.

On the earnings front, the lender reported a 145 per cent jump in its September 2024 quarter (Q2 FY25) standalone net profit, at Rs 553 crore, as against Rs 225.21 crore in the year-ago period. Net interest income climbed 14.3 per cent year-on-year (YoY) to Rs 2,200 crore. Net advances grew 12.4 per cent YoY to Rs 2,35,117 crore.

"YES Bank's results were positive but the stock has been in a long consolidation phase, given the overhang on banks and financials. News reports referring to a delay in stake sale also dampening investor sentiment," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"Existing investors can hold on to the stock. Fresh entry not advised," Bathini also stated. Some media reports claimed that the Reserve Bank was not in favour of selling a majority stake in the private lender to a foreign institution. Business Today, however, didn't independently verify those news reports.

A few technical analysts advised against entering the stock at current levels. "YES Bank has been in a corrective phase for the last three consecutive months. It has plunged below its crucial support of Rs 21. The stock appears to be under pressure and may only recover after decisively surpassing its immediate resistance zone placed at Rs 22. On the downside, the Rs 19-18.5 range is expected to offer some support in the near term," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"YES Bank's share price is currently facing considerable selling pressure. We advise against purchasing the stock at this time," suggested Kushal Gandhi, Technical Analyst at StoxBox.

"Support will be Rs 19 and resistance at Rs 21.5. A decisive move above Rs 21.5 level may trigger a further upside towards Rs 24. The expected trading range will be between Rs 18 and Rs 24 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

The scrip traded higher than the 5-day and 10-day simple moving averages (SMAs) but lower than the 20-day, 30-, 50-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 42.01. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-equity (P/E) ratio of 37.41 against a price-to-book (P/B) value of 1.40. Earnings per share (EPS) stood at 0.55 with a return on equity (RoE) of 3.75.