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On Friday, July 5, 2024, Yes Bank shares experienced a remarkable surge, gaining over 9% in value. This surge was accompanied by a significant increase in trading volume, with over 51 crore shares changing hands, compared to the average weekly volume of 15 crore shares.
The substantial increase in share price and trading volume has ignited speculation about a potential breakout for Yes Bank. Analysts believe that the stock has broken out of a daily trendline and could continue to rally in the near future.
Mandar Bhojane, Equity Research Analyst at Choice Broking, highlighted the technical indicators suggesting a potential breakout. He noted that if the price closes above the ₹27 level, it could reach short-term targets of ₹34. However, he also cautioned investors about immediate support levels located at ₹24 and ₹23, which could provide opportunities to buy on dips.
Bhojane further emphasized the positive outlook based on the Relative Strength Index (RSI), which currently stands at 75 and is trending upward, indicating increasing buying momentum. To mitigate risk, he advised setting a stop-loss (SL) at ₹21.5.
Yes Bank's recent quarterly business update, released on July 2, 2024, revealed a 0.9% growth in loans and advances to ₹2.30 lakh crore for the quarter ended June 2024. This represents a 14.8% increase from the year-ago quarter. However, deposits in Q1FY24 fell marginally by 0.5% QoQ to ₹2.65 lakh crore.
Despite the slight dip in deposits, the bank experienced a YoY increase of 20.8%. The CASA ratio stood at 30.7% in the April-June quarter, compared to 30.9% in the March quarter and 29.4% a year ago.
Yes Bank's Liquidity Coverage Ratio (LCR) also demonstrated a positive trend, reaching 137.8% in Q1FY24, up from 116.1% in the previous quarter and 127% year-on-year.
The bank is set to announce its Q1 results on Saturday, July 20, 2024. In anticipation of these results, Yes Bank share price has been steadily gaining momentum, rising 11% in the past week and over 16% in the past month. Furthermore, the stock has rallied 23% year-to-date (YTD) and over 53% in the last year.
Kotak Institutional Equities predicts that Yes Bank will report a 7.1% YoY increase in net interest income (NII) in the first quarter of FY25, accompanied by a 31.9% YoY rise in net profit. The bank is expected to experience healthy loan growth of 15% YoY, but flat QoQ, potentially offset by rising cost of funds. The net interest margin is anticipated to fall to 2.3%.
Yes Bank has slowed down growth in unsecured loans due to increasing delinquency rates. However, deposit growth at around 21% YoY is strong and outpaces loan growth.
Source: Why is Yes Bank share price skyrocketing today - explained