Buy YES Bank, says Mahantesh Sabarad

Mahantesh Sabarad, Deputy VP-Research at SBI Capital Securities told CNBC-TV18, "There are two-three things to consider whenever YES Bank or similar other banks lend to various projects. First they try to ring fence their lending by providing sufficient amount of collateral. Some of the groups we know that they have lend to are not necessarily in the pink of health but then the ring fencing is done in such a way that the cash flows for the bank are protected from the cash flow of underlying project. If that is so then what we are seeing is that merely highlighting the fact that the exposure of the bank to stressed group companies is very high, is not a reason to downgrade the stock, not a reason to look at the stock negatively because we have to figure out whether there is sufficient cash flow getting generated for the bank."

"We find there is no such problem there off and the stock is over-reacting to that kind of consensus. So by that logic most of the banks have similar exposure, the magnitude may be lower because their size would be relatively larger but most of the banks have similar kind of exposure. So why should one bank be singled out. So YES Bank is a buy," he said.

Disclosure: Analyst does not own the stock and has been registered with Sebi under (Research Analysts) Regulations and his firm doesn't hold the stock.