Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Yes Bank Ltd. indicates a balanced view of the stock’s prospects. It suggests that while the stock is not currently a strong buy, it also does not warrant a sell recommendation. Investors should consider maintaining their positions or exercising caution before initiating new investments. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals.
Quality Assessment
As of 09 January 2026, Yes Bank’s quality grade is assessed as average. The bank demonstrates strong long-term fundamental strength, evidenced by a compound annual growth rate (CAGR) of 16.30% in net profits over recent years. This steady growth reflects the bank’s ability to generate consistent earnings despite a challenging banking environment. However, the latest quarterly results show flat financial performance, with some key metrics such as credit-deposit ratio at 84.45% and interest earned at ₹7,378.84 crore remaining subdued. The profit before tax excluding other income (PBT less OI) stood at a negative ₹766.76 crore for the quarter, indicating some operational pressures.
Valuation Perspective
The valuation grade for Yes Bank is considered fair. The stock currently trades at a price-to-book (P/B) ratio of 1.4, which is at a discount relative to its peers’ historical averages. This valuation suggests that the market is pricing in some risk but also recognising the bank’s recovery potential. The return on assets (ROA) is modest at 0.7%, reflecting cautious investor sentiment. Notably, the company’s price-to-earnings-to-growth (PEG) ratio is 0.4, signalling that the stock may be undervalued relative to its earnings growth prospects. Over the past year, the stock has delivered a robust return of 24.43%, outperforming the broader market indices.
Financial Trend Analysis
The financial trend for Yes Bank is currently flat, indicating a period of consolidation after previous growth phases. While net profits have grown at a healthy annual rate of 16.30%, recent quarterly results have shown limited improvement. The bank’s credit-deposit ratio remains on the lower side, which may constrain lending growth. Despite these challenges, institutional investors hold a significant 65.76% stake in the company, with their holdings increasing by 0.54% over the previous quarter. This high level of institutional confidence often reflects a positive long-term outlook and better fundamental analysis capabilities compared to retail investors.
Technical Outlook
Technically, Yes Bank exhibits a bullish trend. The stock has shown consistent gains across multiple time frames: a 1-day increase of 1.32%, a 1-week rise of 3.28%, and a 6-month gain of 15.62%. Year-to-date, the stock has appreciated by 6.52%, and over the past year, it has outperformed the BSE500 index, which returned 6.23%, by delivering a 24.43% return. This positive momentum supports the 'Hold' rating, suggesting that the stock has upward potential but may face resistance at higher levels.
Market Position and Sector Context
Yes Bank operates within the private sector banking space, classified as a midcap company. Its market capitalisation and sector positioning provide it with opportunities to capitalise on India’s growing banking needs, especially in retail and corporate lending. The bank’s ability to sustain profit growth and improve operational metrics will be critical in maintaining investor confidence and justifying its current valuation.
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Investor Implications of the Hold Rating
For investors, the 'Hold' rating on Yes Bank suggests a cautious approach. The stock’s current fundamentals indicate a stable but not yet accelerating growth trajectory. Valuation metrics imply that the stock is reasonably priced, offering limited upside in the near term but also providing a margin of safety against downside risks. The flat financial trend and mixed quarterly results highlight the need for investors to monitor upcoming earnings and operational improvements closely.
Institutional confidence and positive technical signals provide some reassurance, but the bank’s performance must improve to warrant a more bullish stance. Investors already holding the stock may consider maintaining their positions, while new investors might wait for clearer signs of sustained financial improvement before committing capital.
Summary
In summary, Yes Bank Ltd.’s 'Hold' rating by MarketsMOJO, updated on 25 August 2025, reflects a balanced assessment of the company’s current standing as of 09 January 2026. The bank exhibits average quality, fair valuation, flat financial trends, and bullish technicals. Its strong long-term profit growth and institutional backing are positives, while recent flat quarterly results and modest ROA temper enthusiasm. This rating advises investors to adopt a watchful stance, recognising the stock’s potential while acknowledging prevailing uncertainties.
Looking Ahead
Going forward, key factors to watch include improvements in credit-deposit ratios, profit growth acceleration, and sustained technical momentum. Any significant changes in these areas could influence the stock’s rating and investor sentiment. For now, the 'Hold' rating serves as a prudent guide for investors navigating Yes Bank’s evolving market position.
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