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Business News/ Markets / Stock Markets/  Yes Bank shares surge 28% in last four sessions
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Yes Bank shares surge 28% in last four sessions

In intra-day trade today, Yes Bank shares gained as much as 13.74%
  • The stock hit over three-month high of ₹236.30
  • Yes Bank on Thursday reported a 7% drop in its net profit for December quarter to ₹1,001 crorePremium
    Yes Bank on Thursday reported a 7% drop in its net profit for December quarter to 1,001 crore

    Shares of Yes Bank Ltd gained for fourth session today, rising a combined 28% in four days. The lender on Thursday announced Ravneet Singh Gill as its new managing director and chief executive officer. In last four sessions, Yes Bank added over 10,000 crore to its market value to 54,000 crore.

    In intraday trade today, the stock gained as much as 13.74% to hit over three month high of 236.30 a share - a level last seen on 17 October 2018. At 9.45am, the stock was trading at 231 on NSE, up 8% from its previous close.

    "This has ended the primary uncertainty around leadership succession," said Krishnan ASV, analyst at SBICap Securities, in a 25 January report. "We believe that other uncertainties (lack of growth capital, overhang from NPA divergence) are now transient and are likely to be absorbed relatively more easily," Krishnan added.

    "With the key uncertainty now addressed, we expect a gradual normalization of operational performance and consequent valuation multiples," SBI Cap report added.

    (Read: Yes Bank stock now gets its Gill to breathe in troubled waters)

    Yes Bank on Thursday reported a 7% drop in its net profit for December quarter to 1,001.85 crore against 1,076.87 crore a year ago. Provisions surged 31% to 5,50 crore. Its exposure to IL&FS group stood at 2,530 crore, while total gross slippages was at 2,297 crore.

    Deposits for the quarter was at 2.23 trillion, unchanged from its previous quarter while advances were just 2% higher on quarter-on-quarter basis to 2.44 trillion. Net interest income has fallen 40% from last quarter to 890.90 crore.

    Analyst awaits the Reserve Bank of India's risk audit report for the non-performing loan divergence.

    "We awaits RBI's NPL divergence report - a number not exceeding 15% of the last year's divergence in absolute, may be cheered by the Street and vice-versa," said Jefferies India in a 25 January report.

    "We also need to hear the new CEO's strategy in controlling the divergence, the source of which the Street fears aids handsomely to profits. We also believe Ravneet may be instrumental in swinging cross-border transactions and other structured product solutions on to Yes Bank owing to his deep relations, which would aid profitability. We believe with Ravneet in the front seat, raising capital becomes that much easier," Jefferies India report added.

    Brokerage firm Jefferies India has penciled a short but sharp slowdown in growth, with corresponding weakness in income levels as the bank tries to conserve capital. Jefferies has cut its fiscal year 19-21 estimates between 12-14% mainly driven by flattish NIM, lower fee income, higher expense ratio but a benign credit cost.

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    Published: 25 Jan 2019, 10:20 AM IST
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