At a Glance

Yes Bank – once the poster child of India’s private banking boom, then a full-blown financial horror story – has staged a minor recovery. With net NPAs now below 1%, consistent profits, and FII love slowly trickling in, the stock is up 25% from its lows. But is the comeback real, or are we watching Scam 1992: The Sequel?

1. 📉 Flashback: From Rana’s Empire to RBI’s ICU

Ah, 2018.

• Yes Bank was flying high, trading at ₹380, growing like a fintech startup.
• Rana Kapoor was India’s Rockstar Banker™ with a line of credit longer than Delhi’s Ring Road.

Then came:

• 👮‍♂️ Credit rating downgrades
• 🤐 Concealed NPAs
• 🏦 A literal RBI-led rescue in March 2020
• 💉 State Bank of India became its reluctant godfather with 48% stake

Since then? A clean-up job dirtier than Ganga ghats after Chhath Puja.

2. 🔍 The Numbers – Like Your Ex, Improving but Still Not Marriage Material

✨ Turnaround? Yes. But HDFC Bank it ain’t.

• EPS has improved to ₹0.78 – a 3x jump over FY23.
• Operating profit is back in black after years of red.

But…

• Financing margin is still negative.
• Net Interest Margin (NIM) hovers around 2.6% — miles behind ICICI or Axis.

3. 🚩 Red Flags: Should You Be Worried?

Yes. Here’s why:

• 📉 Low ROE – Just 5%, while peers flaunt 15%+
• 💣 Contingent Liabilities – ₹8.11 lakh crore! That’s more than India’s defence budget.
• 🩺 Interest coverage still weak
• ❌ No dividend – despite reported profits
• 🧨 Legacy bad loans may still haunt through Security Receipts (SR) structure.

It’s like dating someone who says they’ve moved on but still stalks their ex’s Instagram.

4. 💰 The Good News: It’s No Longer Dying

What’s actually going right?

• 🧼 Cleaned up book – GNPA down to 1.6%
• 🐢 Credit growth is steady, not crazy
• 🏦 CASA ratio is stable at 30%+
• 🌍 FIIs increasing stake – from 11% in 2022 to 26.8% now
• 📈 Net profit CAGR of 90% (TTM), from a small base

Also:

🧧 It recently received ₹201 Cr as OTS from a large NPA. So recoveries are real.

5. 🤝 Shareholding: Public Owns This Bank, Literally

The public still owns over 1/3rd of this bank – so if Yes Bank trips again, aam aadmi will be the cushion. Or the casualty.

6. ⚔️ Peer Comparison – Yes Bank vs Big Boys

📌 High P/E for a low ROE bank = Red flag. Market pricing in a miracle revival.

7. 🔮 Fair Value: So What’s It Worth?

Let’s assume:

• EPS FY26 = ₹1.00 (conservative)
• Fair P/E Range = 10–15x (due to PSU-ish metrics)
• 🧮 Fair Value = ₹10–₹15 per share

At CMP ₹20, it’s already factoring in optimism, maybe too much.

Unless it surprises like Rahul Gandhi’s new PR agency, upside seems limited.

🎭 Final Verdict: Say Yes to Yes?

✅ BUY if:

• You believe in turnaround stories
• You’re betting on macro tailwinds, lower NPAs, and high FII inflows
• You’re okay riding sentiment cycles (this is a mood stock)

❌ Avoid if:

• You want high ROE compounding like HDFC or ICICI
• You think a bank with negative historical financing margin = risk
• You fear regulatory/legacy skeletons tumbling out again

🏁 TL;DR

• 🏦 Yes Bank cleaned up its act (for now)
• 💸 Net NPAs under control, profit returning
• 🤔 But high valuation, low ROE, and legacy issues remain
• 📉 FV range = ₹10–₹15 based on realistic EPS/P-E logic
• 🧠 Play the sentiment, but don’t marry the stock

✍️ Written by Prashant | 📅 June 25, 2025
🏷️ yes bank, private sector bank, turnaround stock, npas, SBI rescue, banking sector, eduinvesting