YES Bank Shares See Potential 32% Upside, According to Anand Rathi

Synopsis: Analysts at Anand Rathi Shares & Stock Brokers have identified a significant opportunity in YES Bank shares, predicting a potential upside of 32% in the next six months. After the stock broke a bearish trendline, followed by consolidation and a retest of the trendline as support, the technical indicators suggest that the stock could rise from its current price of Rs 23.5 to Rs 31. A favorable outlook is further strengthened by the stock's respect for the 200-day Exponential Moving Average (200-DEMA) and a bullish breach in the Relative Strength Index (RSI). Investors are advised to target Rs 31, with a stop-loss at Rs 19.75, according to Jigar S Patel, a Senior Technical Research Analyst at Anand Rathi.

On Monday, YES Bank’s shares closed at Rs 23.5, marking a slight uptick and bringing the bank’s market capitalization to approximately Rs 73,700 crore. The stock is seeing increased attention due to several positive technical signals that suggest a bullish turnaround. After consistently following a bearish trendline, YES Bank recently violated this trendline and entered a phase of consolidation, signaling potential support for the stock. This, coupled with the stock’s adherence to the 200-DEMA and its RSI breach, signals a likely end to its bearish phase.

Anand Rathi's analysis suggests a price target of Rs 31, which is about 32% above the current level. Patel emphasized that the confluence of technical signals—including the RSI break and dynamic support levels—indicates a strong bullish outlook for the stock. The firm advises investors to take long positions between Rs 23-24 and hold until the target price is achieved.

In addition to technical factors, YES Bank’s fundamentals have been improving. Care Ratings recently upgraded the bank’s Infrastructure Bonds and Basel III Tier II Bonds to a rating of CARE A+/Stable, enhancing the stock’s credibility. However, regulatory hurdles remain, as the Reserve Bank of India recently stalled Sumitomo Mitsui Banking Corporation’s attempt to acquire a majority stake in YES Bank. This acquisition is now unlikely to materialize in FY25.

Investors should exercise caution and monitor technical and fundamental developments as YES Bank continues its recovery journey. However, the short-term technical setup suggests a potentially rewarding opportunity for those looking to invest in the stock.

Disclaimer:The information provided is for educational purposes and should not be considered as investment advice. Investors are encouraged to conduct their own research or consult with a certified financial advisor before making investment decisions.