Yes Bank Limited shares gained attention in Tuesday’s trading session, rising over 1% to reach ₹20.18.
However, global brokerage firm Goldman Sachs has warned that the stock may fall sharply in the coming days.
According to them, the share price could drop by 25% from Monday’s closing rate of ₹19.89.
Key Details
In a note released on Tuesday, June 24, Goldman Sachs stated that Yes Bank shares could decline by 25% from Monday’s closing price.
Over the past month, the stock of this Mumbai-based private bank has fallen by 4%.
Goldman Sachs has given a ‘sell’ rating on the stock, with a target price of ₹15 per share—the lowest among all analysts.
Out of the 11 analysts tracking Yes Bank, 10 have a ‘sell’ rating, while only Nomura has a ‘hold’ rating.
Insights from Goldman Sachs
After meeting with the bank’s management, Goldman Sachs shared the following points:
Once Sumitomo Mitsui Banking Corporation (SMBC) acquires a 20% stake from the SBI-led lender group, the bank may benefit, especially in mid-sized corporate lending.
The current CEO’s extension is for only six months. The new board, which will include SMBC members, will appoint the next CEO.
The bank aims to achieve a 1% return on assets (RoA) by FY27. This will be supported by improved net interest margins, better efficiency, and higher income from non-interest sources.
Loan growth is projected to be between 13% and 15%, with a strong focus on profitable lending.
Goldman Sachs’ Outlook
Goldman Sachs expects Yes Bank to show 14% loan growth and a 3 basis points improvement in RoA between FY25 and FY27.
However, for the stock to rise significantly, the bank’s return on equity must exceed its cost of equity and be supported by consistent loan growth.
