Yes Bank Share Review: Is It Time to Buy, Sell, or Hold in 2025?

Yes Bank has long been a topic of conversation among investors, with its dramatic rise, fall, and eventual recovery over the years. As we step into 2025, many are wondering whether this stock is still worth the attention it once commanded. Should you buy, sell, or hold Yes Bank shares in today’s market? In this review, we’ll break down the key factors that could influence your decision—looking at its performance, analyst estimates, financials, and more—so you can make an informed choice about your investment strategy. Let’s dive in!

Analyst Estimates

When it comes to Yes Bank’s share, analysts are showing a clear bias toward optimism, with 73% recommending a ‘Buy’, 0% suggesting a ‘Hold’, and 27% advising a ‘Sell’. This indicates a majority of experts believe there’s potential for growth in the stock’s future.

So, what’s driving this confidence? Analysts point to the bank’s recent recovery efforts, improvement in financial health, and strategic management decisions as key reasons for the positive outlook. Over the past few years, Yes Bank has stabilized after a turbulent period, which included capital infusion and changes in leadership. These shifts have laid a foundation for future growth, and with expectations of increasing profitability and market confidence, many believe this is a good time to buy.

Despite these optimistic signals, it’s important to acknowledge the risks. The 27% of analysts advocating a ‘Sell’ point to industry competition and macroeconomic challenges as potential roadblocks. With mixed historical performance, some investors may still approach with caution, though the majority expect Yes Bank to perform well in the coming quarters.

Also Read: How to learn share market

Fundamental Analysis

To gauge Yes Bank’s financial health and market position, let’s dive into some key fundamental metrics:

• Market Capitalization: With a market cap of ₹70,280 Crores, Yes Bank stands as a notable player in the banking sector. However, when we compare it to giants like HDFC Bank and ICICI Bank, which boast market caps over ₹13 lakh Crores, it’s clear that Yes Bank still has a considerable distance to cover in terms of market presence and investor confidence.
• Return on Equity (ROE): At 3.18%, Yes Bank’s ROE reflects its efficiency in generating profits from shareholders’ equity. While this figure indicates some level of profitability, it’s relatively low compared to industry leaders, suggesting that there’s room for improvement in utilizing equity capital to drive growth.
• Price-to-Earnings Ratio (P/E): Yes Bank’s P/E ratio of 48.74 raises some eyebrows, especially since the industry average sits at 14.03. This disparity suggests that Yes Bank’s stock might be overvalued at the moment, indicating that investors are paying a premium for future growth that may not materialize as expected.
• Price-to-Book Ratio (P/B): The P/B ratio of 1.54 offers insight into whether the stock is trading at a fair value. A ratio above 1 can imply that investors are expecting growth; however, in the context of Yes Bank’s financials, it raises questions about whether current prices are justified, given the bank’s recovery phase.
• Earnings Per Share (EPS): With an EPS of 0.46, Yes Bank is demonstrating signs of profitability, which is encouraging for potential investors. This figure suggests that the bank is beginning to generate earnings for its shareholders, yet it’s crucial to monitor how this evolves over the coming quarters.
• Dividend Yield: Currently standing at 0%, Yes Bank is not distributing dividends to shareholders, which reflects a strategic choice to reinvest earnings back into the business. This approach can be seen as a positive sign for growth-oriented investors, as it suggests that the bank is focusing on expansion and long-term sustainability rather than immediate payouts.

While Yes Bank shows potential with its earnings and market cap, several fundamental indicators signal caution. Investors should weigh these factors carefully against the backdrop of the bank’s recovery journey and competitive landscape in the banking sector.

Financial Performance

A closer look at Yes Bank’s financial performance reveals significant trends that paint a picture of recovery and growth:

• Revenue Trends: Yes Bank has experienced steady revenue growth, climbing from ₹22,424 Crores in 2022 to ₹32,961 Crores in 2024. This upward trajectory is a promising sign that the bank is successfully expanding its operations and generating more income. The consistent growth in revenue indicates a robust demand for its banking services and products, which is crucial for sustaining long-term profitability.
• Profit Trends: The journey from loss to profit is a testament to Yes Bank’s resilience. After posting a staggering loss of -₹16,433 Crores in 2020, the bank has made a remarkable turnaround, reporting net profits of ₹1,285 Crores in 2024. This recovery showcases effective management strategies and improved operational efficiency. A quarterly analysis from June 2023 to June 2024 reveals that the bank has shown positive growth in profits, further solidifying its recovery story. For instance, the bank’s profits have steadily increased from ₹347 Crores in June 2023 to ₹516 Crores by June 2024, highlighting its improving financial health.
• Net Worth: Yes Bank’s net worth has also shown significant growth, rising from ₹21,695 Crores in 2020 to ₹42,155 Crores in 2024. This doubling of net worth underscores the bank’s ability to rebuild its capital base and restore investor confidence. A growing net worth is essential for any financial institution as it reflects stability and the capacity to withstand market fluctuations.

Yes Bank’s financial performance reflects a narrative of recovery and growth, marked by rising revenues, a turnaround in profits, and an increasing net worth. These factors contribute positively to the bank’s long-term prospects and could position it favorably in the competitive banking landscape.

Balance Sheet Overview

Examining Yes Bank’s balance sheet offers further insights into its financial stability and overall health:

• Assets & Liabilities:
  Yes Bank’s total assets have seen a significant increase, rising to ₹4,06,362 Crores in 2024. This growth reflects the bank’s enhanced capacity to generate revenue and manage its operations effectively. A higher asset base can indicate strong market confidence and an ability to leverage resources for future growth. On the flip side, total liabilities have also increased, climbing from ₹2,36,137 Crores in 2020 to ₹3,64,206 Crores in 2024. While an increase in liabilities might raise concerns about debt levels, it’s essential to view this in the context of the bank’s overall asset growth. A rising liability figure can suggest that the bank is borrowing more to fuel growth, which can be a healthy sign if managed well.
• Debt-to-Equity Ratio:
  The debt-to-equity ratio has improved slightly to 7.75 in 2024, indicating a balanced approach to leveraging debt. This ratio provides insights into how much debt the bank is using to finance its assets compared to its equity. A moderate level of debt can be beneficial as it allows the bank to take advantage of growth opportunities without overly compromising its financial stability.
• Implications on Financial Health:
  The combination of increased assets and rising liabilities, coupled with a steady debt-to-equity ratio, suggests that Yes Bank is in a stronger position than in previous years. While it is crucial for the bank to manage its liabilities effectively, the growth in assets indicates that it is expanding its operational capacity. This balance indicates a more robust financial health, which can foster investor confidence and potentially attract more deposits and investments.

Yes Bank’s balance sheet reveals a bank that is strategically increasing its asset base while managing its liabilities. This careful balancing act is critical for maintaining financial stability and pursuing future growth opportunities. As Yes Bank continues on its recovery path, monitoring these metrics will be essential for stakeholders and potential investors.

Cash Flow Analysis

Understanding Yes Bank’s cash flow dynamics from 2020 to 2024 is crucial for assessing its operational efficiency and financial stability. Here’s a detailed look at the trends and implications of its cash flow analysis:

• Fluctuating Cash Flow:
  Yes Bank has experienced significant fluctuations in its cash flow over the past few years. In 2020, the bank faced a severe cash crunch, marked by negative cash flow from operating activities at ₹-57,721 Crores. However, as the bank began to stabilize, there was a recovery in subsequent years, with cash flow from operating activities turning positive by 2022. Yet, 2023 saw another downturn, with cash flow dipping to ₹-25,816 Crores. This inconsistency raises concerns about the bank’s ability to generate sufficient cash to sustain its operations and invest in growth.
• Operating Cash Flow:
  The notable negative operating cash flow in 2023 is particularly concerning. This indicates that the bank’s core operations are not generating enough cash, which could hinder its capacity to meet obligations, fund new projects, and support expansion initiatives. For investors, sustained negative cash flow can be a red flag, suggesting potential liquidity issues and raising questions about the bank’s profitability moving forward.
• Impact of Capital Expenditures and Financing Activities:
  Yes Bank’s capital expenditures (capex) have varied over the years, reflecting its investment strategy and growth initiatives. While capex is essential for long-term growth, excessive spending without corresponding cash inflows can strain liquidity. The bank’s capex was ₹-791.59 Crores in 2023, indicating a continued commitment to investing in infrastructure and technology to improve services and operational efficiencies. Financing activities also play a critical role in shaping cash flow. The bank’s reliance on financing activities has led to positive cash inflows, such as the ₹11,450 Crores from financing activities in 2023. This funding is crucial for bridging gaps during periods of negative cash flow from operations, but it may lead to higher debt levels if not managed prudently.

For investors, understanding these cash flow metrics is vital. Positive cash flow from operating activities is a strong indicator of a company’s financial health and ability to sustain itself without relying heavily on external financing. As Yes Bank continues its recovery journey, monitoring its cash flow will be essential to evaluate whether it can maintain operational efficiency, support growth, and ultimately enhance shareholder value.

Peer Comparison

When evaluating Yes Bank’s performance, it’s essential to compare it with key competitors like HDFC Bank, ICICI Bank, and Axis Bank. This analysis provides insights into its market position and highlights areas where it may need improvement.

• Price Comparison:
  As of now, Yes Bank’s stock is priced significantly lower than its leading counterparts. For instance, HDFC Bank trades around ₹1,700, ICICI Bank at approximately ₹900, and Axis Bank near ₹800. In contrast, Yes Bank’s price is around ₹16, which indicates that while it may present a bargain opportunity, it also reflects the bank’s historical challenges and current recovery phase.
• P/E and P/B Ratios:
  Yes Bank’s Price-to-Earnings (P/E) ratio stands at 48.74, which is substantially higher than industry leaders. For comparison, HDFC Bank’s P/E ratio is about 20.50, ICICI Bank’s at 18.75, and Axis Bank’s at 22.00. This indicates that Yes Bank’s stock may be overvalued relative to its earnings potential, suggesting that investors are either expecting substantial future growth or are pricing in a high degree of risk. Regarding the Price-to-Book (P/B) ratio, Yes Bank’s ratio of 1.54 is higher than that of its competitors, where HDFC Bank sits at approximately 3.10, ICICI Bank at 2.70, and Axis Bank at 1.90. A lower P/B ratio in comparison to peers often suggests that the stock might be undervalued or that the bank’s fundamentals are weaker.

In the competitive landscape, Yes Bank’s financial metrics reveal both challenges and opportunities. While its low stock price might attract value-oriented investors, the high P/E ratio signals caution, suggesting that investors may have lofty expectations that the bank must fulfill. Additionally, its P/B ratio indicates that Yes Bank is trading at a premium compared to its peers, which might not align with its current financial performance and recovery status.

While Yes Bank is on a path to recovery, its current valuations and ratios suggest that it still has significant ground to cover to compete effectively with established players like HDFC Bank, ICICI Bank, and Axis Bank. Investors should keep an eye on the bank’s ability to improve its fundamentals and operational efficiency to enhance its market standing in the long term.

Yes Bank Shareholding Pattern

Understanding the shareholding pattern of Yes Bank offers valuable insights into its ownership structure and can guide individual investors in their decision-making. Here’s a breakdown of the current shareholding distribution:

• Domestic Institutions (38.12%):
  A significant portion of Yes Bank’s shares is held by domestic institutional investors. This group includes mutual funds, insurance companies, and other financial institutions. Their substantial stake suggests a degree of confidence in the bank’s potential for recovery and growth, which can positively influence individual investors’ perceptions of the stock.
• Retail and Others (34.61%):
  Retail investors and other small shareholders account for over a third of the total shareholding. This indicates a healthy level of interest and participation from individual investors, reflecting optimism or belief in Yes Bank’s turnaround strategy. However, it also means that retail investors should stay informed about market movements and company performance, as their decisions can significantly affect the stock price.
• Foreign Institutions (27.07%):
  The presence of foreign institutional investors signifies that Yes Bank has attracted international interest. This can be a positive indicator of the bank’s reputation and growth prospects on a global scale. However, it also suggests that the stock’s performance may be influenced by global market conditions and sentiment.

Implications for Individual Investors

The shareholding pattern carries several implications for individual investors:

1. Confidence Indicators:
   The large stakes held by domestic institutions and foreign investors suggest a level of confidence in Yes Bank’s future. Individual investors may take this as a positive sign, indicating that knowledgeable investors are backing the bank.
2. Market Sentiment:
   A substantial retail presence implies that individual investors are engaged and optimistic about the bank’s recovery. However, they should also be cautious, as the actions of retail investors can sometimes lead to increased volatility, especially in response to market news.
3. Investment Decisions:
   For individual investors, understanding the shareholding distribution can aid in making informed investment decisions. For instance, the dominance of institutional investors may suggest that the stock is less likely to be subject to sudden price swings driven by retail sentiment, which can be reassuring for long-term investors.
4. Potential for Future Changes:
   Changes in the shareholding pattern, such as increased buying from institutional investors or a rise in retail selling, can signal shifts in market confidence and should be monitored closely.

Yes Bank’s shareholding pattern reflects a balanced mix of domestic institutions, retail investors, and foreign entities. For individual investors, this structure can provide insights into market sentiment and confidence levels, aiding in making informed decisions in their investment journey.

9. Technical Indicators and Chart Analysis

Analyzing technical indicators and chart patterns is essential for investors looking to understand Yes Bank’s stock price trends and make informed decisions. Here’s a detailed look at the current stock price trends, technical indicators, support and resistance levels, and the overall long-term trend.

Current Stock Price Trends

As of the latest data, Yes Bank’s stock price has experienced volatility in recent months. The price has shown a pattern of fluctuations, reflecting broader market trends and investor sentiment toward the banking sector. Key indicators that traders often look at include moving averages, relative strength index (RSI), and MACD (Moving Average Convergence Divergence), which can provide insights into potential future movements.

Technical Indicators

• Moving Averages:

The 50-day and 200-day moving averages can indicate the stock’s short-term and long-term trends. If the 50-day moving average crosses above the 200-day moving average (a bullish crossover), it may signal upward momentum. Conversely, if the 50-day moving average crosses below the 200-day moving average (a bearish crossover), it may indicate downward pressure.

• Relative Strength Index (RSI):

An RSI above 70 suggests that the stock is overbought, while an RSI below 30 indicates it is oversold. As of the latest readings, if Yes Bank’s RSI is nearing or exceeding 70, it could signal a potential pullback. Conversely, if it’s below 30, it may indicate a buying opportunity.

• MACD:

This indicator can help identify momentum changes. A bullish signal occurs when the MACD line crosses above the signal line, indicating potential upward price movement. Conversely, a bearish signal is seen when the MACD line crosses below the signal line.

Support and Resistance Levels

• Support Levels:
  Identifying support levels is crucial as these are the price points where the stock has historically had difficulty falling below. For Yes Bank, key support levels can be observed at various historical lows. If the stock approaches these levels, it may find buying interest, preventing it from falling further.
• Resistance Levels:
  Resistance levels are points where the stock has faced selling pressure in the past. If Yes Bank’s stock price approaches these levels, it may struggle to rise further unless significant buying interest materializes. Current resistance levels should be marked on the chart for quick reference.

Long-Term Trend: Bullish or Bearish?

• Bullish Sentiment:
  If the stock price is consistently making higher highs and higher lows, combined with positive moving averages and strong volume, it suggests a bullish long-term trend. Additionally, if fundamental factors such as improving financial performance and analyst recommendations align with these indicators, it strengthens the bullish outlook.
• Bearish Sentiment:
  Conversely, if the stock is making lower highs and lower lows, along with weak technical indicators and negative market sentiment, it indicates a bearish trend. Factors like declining earnings, increased debt levels, or adverse market conditions can contribute to this sentiment.

The technical indicators and chart analysis of Yes Bank provide a comprehensive view of its stock price trends and potential future movements. By understanding the current trends, support and resistance levels, and the long-term outlook, investors can make more informed decisions about their investments in Yes Bank. Regularly monitoring these indicators is crucial as market conditions can change rapidly, affecting the bank’s stock performance.

Final Verdict

After conducting a thorough analysis of Yes Bank’s current performance, financial health, and market positioning, it’s time to draw some conclusions regarding the stock’s investment potential. Based on various factors, including fundamental analysis, financial performance, peer comparisons, and technical indicators, here’s a concise verdict for potential investors:

Buy

• Long-Term Potential: Yes Bank presents a compelling opportunity for investors looking for turnaround stocks. The bank has demonstrated steady revenue growth and a return to profitability after overcoming past challenges. If you’re willing to take on some risk, this stock could provide substantial returns as the bank continues to stabilize and expand its operations.

Sell

• Concerns Over Valuation: Investors wary of Yes Bank’s historical volatility may find the current valuation concerning, especially given the high price-to-earnings (P/E) ratio compared to industry peers. For those prioritizing stability and seeking safer investment options, it may be prudent to sell and reallocate resources into more reliable assets.

Hold

• Existing Shareholders: For current shareholders, the recommendation is to hold on to Yes Bank shares. The bank is showing signs of recovery, and holding can provide an opportunity for potential gains as the stock stabilizes. It’s advisable to keep an eye on future performance and market conditions to decide when might be the best time to sell.

Yes Bank’s future looks promising for those prepared to embrace some volatility, while conservative investors may opt for caution. Each investor’s risk appetite and investment strategy will dictate the most appropriate action. As always, thorough research and continuous monitoring of the market will aid in making informed decisions regarding Yes Bank shares.

Conclusion

As we wrap up our analysis of Yes Bank, it’s essential to recap the key points regarding its financial performance and market outlook.

Yes Bank has undergone significant transformation in recent years, moving from a period of substantial losses to a more stable financial footing. With a market capitalization of ₹70,280 crores, a return on equity (ROE) of 3.18%, and a notable recovery in net profits from a loss of ₹16,433 crores in 2020 to a profit of ₹1,285 crores in 2024, the bank is showing promising signs of recovery. Furthermore, the consistent growth in revenue—from ₹22,424 crores in 2022 to ₹32,961 crores in 2024—indicates a positive trend that investors might find appealing.

However, it’s crucial to consider the current valuations, especially the price-to-earnings (P/E) ratio of 48.74, which suggests that Yes Bank might be overvalued compared to its peers. The high price-to-book (P/B) ratio of 1.54 also raises some concerns about whether the stock is trading at a fair value.

Advice for Investors

When considering an investment in Yes Bank, it’s vital to align your decision with your individual risk tolerance and investment goals:

• For Aggressive Investors: If you have a higher risk appetite and are looking for stocks that could offer substantial long-term returns, Yes Bank may fit well in your portfolio. The potential for growth, particularly as the bank continues to recover and expand its operations, presents an enticing opportunity.
• For Conservative Investors: If your investment strategy leans towards safety and stability, you might want to approach Yes Bank with caution. The bank’s past volatility and current valuation could pose risks that may not align with a conservative investment philosophy.
• For Existing Shareholders: If you currently hold Yes Bank shares, consider your position carefully. Given the signs of recovery, you may choose to hold your shares while monitoring market conditions, allowing for potential gains as the bank continues to stabilize.

In summary, Yes Bank’s journey reflects a blend of opportunity and risk. By evaluating your investment strategy and being mindful of the bank’s historical context and current market position, you can make a more informed decision that aligns with your financial objectives. Always remember to stay updated on market trends and financial reports, as they can significantly impact your investment outcomes.