As Yes Bank rises 2%, here’s what analysts are talking about it

Yes Bank

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26 Aug, 2025 12:21

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Shares of Yes Bank surged over 2 percent intraday after analysts were upbeat on the stock, citing its good financials and a possible re-rating later.

IIFL Institutional Equities has a buy call on the stock with an increased target price of Rs 1,920. The research firm believes that the significant strengthening of capital position would bolster earnings outlook and enable quick market share gains.

"We lower earnings and ROE estimates for the bank to account for the increase in its share capital base. Despite this, the bank’s key earnings metrics would compare well with peers, warranting a gradual re-rating of the stock," the firm wrote in its report.

The private lender recently raised over Rs 4,900 crore through a qualified institutional placement (QIP).

“The bank will likely pursue growth aggressively with such strong capitalisation. The constrained capital position of state-owned banks, risk aversion among a few large private sector banks, and new avenue of growth through the offshore banking unit should enable Yes Bank to increase loan market share significantly,” it said in the report.

Meanwhile, Motilal Oswal said that the fundraise added 300 basis points to the bank’s CET1 ratio.

“With an incremental market share of 3.5 percent +, aggressive roll-out of retail/SME products and strong corporate relationships, the bank is expected to register loan CAGR (FY17-20) of 28% — at least 2x of system loan growth,” the brokerage house said in its report.

Furthermore, the bank’s profitability will benefit from the fund raise, IIFL said. “Earnings and profitability should benefit from the sustained improvement in its liability franchise and diversification in fee-income revenue. Consequently, earnings volatility would diminish over the long term,” it said in the report.

Adds Motilal Oswal that robust loan growth, NIM expansion and rising fee income contribution will drive 27 percent PAT CAGR through FY20. “This will see RoA improving to 2 percent (v/s 1.8 percent currently) and RoE being maintained at 20 percent,” it said in its report.

The stock gained over 9 percent in a month, while its three-day gain stood at 1 percent. At 12:21 hrs, the stock was quoting at Rs 1,585.25, up Rs 32.20, or 2.07 percent on the BSE. It touched a 52-week high of Rs 1,590.50.