Yes Bank shares have been on a volatile ride this week, following the announcement of their Q1 2024 results last Saturday. The week started on a positive note with a surge in the stock price on Monday, driven by strong buying interest. The optimism quickly faded, and the shares have been on a downward trend for the last three consecutive sessions.
On Tuesday, the stock opened with a downside gap at ₹24.59 per share on the NSE, touching an intraday low of ₹24.42, which marked an approximate 2% loss for the day. By the end of the session, Yes Bank shares had closed at ₹25.67, a significant drop from the earlier highs seen on Monday. Over the last three days, the share price has slid by around 5%.
Market analysts have identified two main reasons for this decline: profit-booking and speculation about a potential stake sale. Yes Bank’s fundamentals have shown continuous improvement, with the Q1FY25 results reflecting an attractive set of numbers. The bank reported a standalone net profit of ₹502.43 crore for Q1FY25, which is a substantial 46.4% increase compared to ₹342.52 crore in the same quarter last year. Additionally, the interest earned during this period was reported at ₹7,719.15 crore, up 19% from ₹6,443.22 crore in Q1FY24.
Despite these strong financials, profit-booking has emerged as a significant trigger for the recent fall in the share price. After Monday’s sharp rise, many investors chose to lock in their gains, leading to a sell-off in the subsequent sessions. According to Avinash Gorakshkar, Head of Research at Profitmart Securities, this profit-booking was widely anticipated as the stock had priced in much of the good news before the Q1 results were announced.
Another factor contributing to the decline is market speculation about a potential stake sale by the SBI in Yes Bank. This speculation gained traction following the Government of India’s recent stake sale in IDBI Bank. Although there has been no official announcement from either SBI or Yes Bank regarding this matter, the rumors have created uncertainty among investors. Many shareholders, especially those with a short- to medium-term view, have opted to book profits amid these speculative concerns.
Gorakshkar also noted that some brokerages have issued a ‘sell’ recommendation post the Q1 results, further fueling the profit-booking trend. However, he emphasized that neither SBI nor Yes Bank has indicated any plans for a stake sale. Once the market receives a clear statement from SBI, it could present a good opportunity for bottom fishing, and investors might consider accumulating more shares during this price fall.
From a technical perspective, Yes Bank shares have strong support at ₹23 and face resistance at ₹28. Sumeet Bagadia advises existing shareholders to hold their positions with a stop loss at ₹23, aiming for a near-term target of ₹28. For fresh investors, Bagadia suggests buying at current levels with the same stop loss and target.
The recent volatility in Yes Bank shares reflects the complex dynamics of market sentiment, profit-booking behavior, and speculative rumors. While the short-term outlook may seem uncertain, the underlying fundamentals of Yes Bank appear solid, as evidenced by the robust Q1FY25 results. As the market waits for clarity on the stake sale rumors, investors are advised to focus on the fundamentals and consider the long-term potential of the stock.
