Yes Bank shares saw significant movement in early trading on Monday following the announcement of its better-than-expected Q1 results for 2024. The shares opened at ₹25.90 and quickly climbed to an intraday high of ₹25.99, marking an impressive rise of nearly 5%. However, the initial surge was short-lived as profit-booking led to a pullback, with shares dipping to an intraday low of ₹25.36 on the NSE.
The strong Q1 results were the primary driver behind the early morning rally in Yes Bank shares. The bank reported a notable improvement in its current account savings account ratio, indicating a decrease in funding costs during the previous quarter. This reduction in funding costs is expected to positively impact the bank’s profitability in the short to medium term. Additionally, Yes Bank’s improved asset quality has further bolstered investor confidence, as it signals better business and revenue prospects for the private lender.
Stock market experts highlighted that Yes Bank’s positive Q1 performance has been a key factor in the recent rise of its share price. Avinash Gorakshkar, Head of Research at Profitmart Securities, emphasized that the bank’s quarterly results have showcased a year-over-year increase in net profit and interest income. These strong financial metrics have contributed to the market’s optimism about the bank’s future profitability.
Yes Bank reported a standalone net profit of ₹502.43 crore for Q1FY25, up 46.4% compared to the ₹342.52 crore profit after tax (PAT) reported in Q1FY24. The interest earned during Q1FY25 was ₹7,719.15 crore, a 19% increase from ₹6,443.22 crore in the same period last year. Furthermore, the bank’s standalone NII rose by 12.2% year over year to ₹2,243.9 crore, compared to ₹2,000 crore in the previous year. These figures reflect the bank’s solid financial performance and growth trajectory.
The CASA ratio for Yes Bank in Q1FY25 stood at 30.80%, up from 29.40% in the corresponding period of the previous fiscal year and 30.90% in the last quarter. This improvement in the CASA ratio is a positive indicator of the bank’s reduced funding costs and its ability to attract low-cost deposits, which are crucial for maintaining profitability.
Sumeet Bagadia noted that Yes Bank shares opened above their Friday closing price and have been sustaining above that level. He advised investors to consider a fresh entry into Yes Bank shares with a stop loss set at ₹23. Bagadia also mentioned that existing shareholders should hold their positions, maintaining a stop loss at ₹23. He predicted that if Yes Bank shares sustain above the ₹25 mark, they could potentially bounce back strongly and reach ₹28 and ₹30 apiece in the near future.
Despite the initial rally, the subsequent profit-booking indicates that investors are exercising caution. The ability of Yes Bank shares to close above the ₹25 mark will be crucial for maintaining the upward momentum. The market’s response to the bank’s Q1 results has been overwhelmingly positive, but continued performance and strategic execution will be necessary to sustain investor confidence.
Yes Bank’s recent performance underscores its efforts to strengthen its financial position and operational efficiency. The bank’s focus on improving asset quality and funding costs has laid a strong foundation for future growth. Investors will be closely monitoring Yes Bank’s performance in the coming weeks to assess the sustainability of the current trends and the bank’s ability to meet market expectations.
