Yes Bank share price rockets high as the Nifty Bank index hits ATH

Indian bank stocks are in a strong comeback as investors cheer their growing earnings and the performance of the Indian economy. The closely-watched Nifty Bank Index rocketed to a record high of ₹49,450 on Monday morning. It has soared by over 11% from its lowest point this year.

Yes Bank printed strong results

Yes Bank, the company backed by Carlyle and Advent, has not been left behind in this rally. It jumped by over 4% on Monday, reaching a high of ₹28.60 on Monday, its highest point since February 16th. It has risen by over 30% from the lowest swing in 2023.

Yes Bank, which is not part of the Nifty Bank Index, rally accelerated as the company continued with its turnaround. This view was evidenced last Friday when the company published strong financial results.

Yes Bank generated a net profit of ₹452 Crs in the fourth quarter, higher by 123% from the same period in 2023. This profit was also about 95.2% higher than in the same quarter during the year.

For the year, the company generated a net profit of ₹1,251 Crs, a 74% YoY increase. The sharp increase of its profits was partially because of its one-off tax refunds, ARC sale, and SR recoveries.

The company had other successes during the quarter as its balance sheet crossed the crucial ₹4 lakh Crs. Deposits grew by over 20% in Q4.

Yes Bank’s performance is a sign that the management is executing well as it continues to turn around the company. 

For starters, Yes Bank came close to bankruptcy in 2020, weighed down by toxic debts in its balance sheet. In the aftermath, the company was forced to raise cash and receive investments from the biggest Indian banks. Some of these banks have started to slowly reduce their stakes in the company. 

As part of the turnaround, the company also raised equity financing from Advent and Carlyle Group. It also sold most of its toxic assets to JC Flowers, a firm that invests globally.

Yes Bank share price forecast

YES chart by TradingView

The weekly chart shows that the Yes Bank’s stock price has staged a strong recovery in the past few months. This recovery is in line with my last prediction in December last year.

It has crossed the crucial resistance level at INR 25.65, the neckline of the inverse head and shoulders pattern. That is one of the most popular bullish signs.

The stock has jumped above the 25-week and 50-week moving averages. Therefore, there are signs that the bull run will continue barring any major negative event. If this happens, the next point to watch will be the all-time high at ₹32.85, which is about 22% above the current level.

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