Yes Bank shares fall 3% today after Q3 results; brokerages bearish on growth, returns

Yes Bank

• Yes Bank shares fell nearly 3 percent despite a 55 percent jump in Q3 net profit
• Brokerages remain bearish, citing weak credit growth and sub-par returns
• Analysts' median target price for Yes Bank is Rs 18, implying further downside

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Shares of Yes Bank fell nearly 3 percent in early trade on Monday despite the lender reporting a sharp jump in fiscal third quarter net profit, as brokerages flagged concerns over weak credit growth, sub-par returns and valuation comfort, and largely maintained their bearish stance on the stock.

Yes Bank stock was trading at Rs 22.78 in the afternoon session, down 2.9 percent, even as the private sector lender posted a 55 percent year-on-year rise in standalone net profit for Q3 FY26, aided by a sharp reduction in provisions. Over the past one year, Yes Bank shares are still up over 20 percent, outperforming the benchmark Nifty 50’s roughly 10 percent gain.

Profit jump fails to reassure Street

Yes Bank’s Q3 profit growth was driven largely by a steep 91 percent year-on-year fall in provisions, helping lift return on assets to around 0.9 percent. However, several brokerages said that the improvement was not backed by a meaningful acceleration in core growth or sustainable returns.

Anand Rathi said retail stress remains visible and return on equity continues to be sub-par, adding that the profit uptick was largely a function of lower provisioning rather than a structural improvement in earnings quality.

Emkay Global maintained its ‘Sell’ rating with a target price of Rs 20, citing anemic credit growth of around 5 percent year-on-year, dragged by the retail segment. The brokerage said the bank remains dependent on recoveries from non-performing assets to drive profitability, while growth and return metrics continue to lag peers.

Emkay also flagged elevated valuations, noting that the stock trades at about 1.4 times FY27 estimated adjusted book value, which it considers demanding given the weak growth profile and modest return outlook. While management commentary suggests that corporate portfolio consolidation may be largely behind and growth could improve, Emkay said it remains cautious, pointing to the possibility of another round of portfolio clean-up following potential top management changes.

Citi adds to caution; analyst ratings show bearishness

Citi, which also has a ‘Sell’ stance on the stock, acknowledged the bank’s efforts to reconstruct stressed assets and improve net interest margins. However, the brokerage said it is closely monitoring the Supreme Court hearing related to the AT-1 bonds case, which remains an overhang.

According to LSEG data cited by Reuters, the stock is currently rated ‘Sell’ on average by 11 analysts, with a median target price of Rs 18, implying downside from current levels.

While brokerages broadly agree that Yes Bank has made progress on asset quality and balance-sheet clean-up since its reconstruction, they remain unconvinced about the sustainability of earnings improvement without a sharper pickup in loan growth and a clearer path to higher returns.

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