YES Bank share price jumps over 6% to hit 52-week high; is there more steam left?

YES Bank share price jumped over 6 per cent to hit its fresh 52-week high of ₹26.25 in intraday trade on NSE on Tuesday, January 16. YES Bank share price opened at ₹24.95 against the previous close of ₹24.75 and jumped 6.1 per cent to the level of ₹26.25. Around 12:35 pm, YES Bank shares were 4.44 per cent up at ₹25.85 on the NSE.

YES Bank share price jumped on Tuesday even as the bank reported the previous day that the Reserve Bank of India (RBI) had imposed a monetary penalty of ₹10,000 and ₹5,000 on the bank for not providing the exchange facilities for the mutilated notes to the public as per RBI's extant instructions and relating to training on cash handling, respectively.

YES Bank share price has been witnessing strong gains since November last year. Monthly, YES Bank shares gained 21 per cent in November and 11 per cent in December. The stock has gained 21 per cent in January so far.

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Analysts are positive about the bank's prospects. Some of them expect the lender to report healthy December quarter earnings.

YES Bank is to report its December quarter earnings on Saturday, January 27.

Brokerage firm Emkay Global expects YES Bank to report a 705.6 per cent year-on-year (YoY) and 62.6 per cent quarter-on-quarter (QoQ) jump in its Q3 net profit at ₹415.1 crore.

As per the brokerage firm, net interest income (NII), which is the difference between the interests earned and the interest paid, of YES Bank is expected to increase by 4.5 per cent YoY and 5.3 per cent QoQ to ₹2,059 crore.

Net interest margin (NIM) of the bank may dip 8bps YoY and rise 3 bps QoQ to 2.4 per cent in Q3. Operating profit, however, may decline 6.6 per cent YoY but rise 2.7 per cent QoQ to ₹853.4 crore, Emkay said.

“We expect margins to remain largely flat, which coupled with some moderation in LLP should support profitability. Slippages are expected to moderate QoQ,” Emkay said.

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Recently, media reports quoted the S&P Global Market Intelligence report which suggested YES Bank saw the highest surge in market capitalisation among Indian banks for the December quarter of the current financial year. The bank witnessed a significant 24.4 per cent increase in market capitalisation, reaching ₹61,694 crore during the December quarter. This helped YES Bank move two slots higher to 14th position in the list of top 20 Indian banks by market cap.

Moreover, YES Bank claimed it achieved the highest environmental, social, and governance (ESG) score amongst Indian banks in the S&P Global Corporate Sustainability Assessment (CSA) 2023. The bank scored 73 (out of 100) in the 2023 S&P Global Corporate Sustainability Assessment, reflecting a marked improvement of 5 points over its score of 68 in 2022.

More steam left?

While the stock is witnessing bullish momentum, technical analysts believe the stock is poised to move higher in the near term.

According to Vaishali Parekh, vice president of technical research at Prabhudas Lilladher, the stock has picked up in the last two months gaining with having two instances of higher low formation pattern on the daily chart. This has improved the bias and a further rise is anticipated with a decisive breach above ₹23 confirmed as of now.

"The next targets visible are ₹34 and ₹40 levels with strength sustaining but at the same time, from current levels, only a decisive breach below ₹22 should weaken the bias," said Parekh.

Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers observed that recently this counter gave a clean breakout on the weekly timeframe chart along with Stochastics reversing from the 70 zone which is looking lucrative at current levels.

"Investors/traders can enter longs in the zone of ₹24-25 with an upside target of ₹31 and a stop loss of ₹21 on a daily closing basis," said Patel.

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