Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Yes Bank Ltd. indicates a balanced outlook for investors. 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 existing positions and monitor the stock for further developments. This rating reflects a combination of factors including the company’s quality, valuation, financial trends, and technical indicators.
Quality Assessment
As of 20 January 2026, Yes Bank’s quality grade is assessed as average. The bank has demonstrated strong long-term fundamental strength, with a compound annual growth rate (CAGR) of 24.08% in net profits. This robust growth rate highlights the company’s ability to expand its earnings consistently over time. Additionally, the bank’s asset quality remains healthy, with the latest quarterly gross non-performing assets (NPA) ratio at a low 1.50%, signalling effective risk management and credit control.
Valuation Perspective
The valuation grade for Yes Bank is considered fair. Currently, the stock trades at a price-to-book (P/B) ratio of 1.4, which is at a discount relative to its peers’ historical averages. This suggests that the stock is reasonably priced, offering potential value for investors without being overvalued. The return on assets (ROA) stands at 0.7%, reflecting moderate profitability relative to the bank’s asset base. Furthermore, the price/earnings to growth (PEG) ratio is 0.5, indicating that the stock’s price is attractive relative to its earnings growth potential.
Financial Trend and Performance
The financial trend for Yes Bank is positive. The latest half-yearly data shows a credit-deposit ratio of 88.01%, the highest recorded, which points to efficient utilisation of deposits for lending activities. Net interest income (NII) for the recent quarter reached a peak of ₹2,465.60 crore, underscoring strong core banking operations. Over the past year, the stock has delivered a return of 16.42%, outperforming the broader market benchmark (BSE500) which returned 6.14% over the same period. This market-beating performance is supported by a 48.4% increase in profits during the last year, reflecting solid earnings momentum.
Technical Outlook
Technically, Yes Bank is rated bullish. Despite a slight decline of 3.12% on the day of analysis, the stock has shown resilience with a 9.32% gain over the past six months and a 2.04% increase year-to-date. The technical indicators suggest that the stock is in an upward trend, supported by strong institutional holdings which currently stand at 65.76%. Institutional investors have increased their stake by 0.54% over the previous quarter, signalling confidence in the bank’s prospects from knowledgeable market participants.
What This Means for Investors
For investors, the 'Hold' rating implies a cautious but optimistic stance. The bank’s solid fundamentals and positive financial trends provide a foundation for potential future gains. However, the fair valuation and average quality grade suggest that investors should remain vigilant and consider market conditions before increasing exposure. The bullish technical signals offer some reassurance of continued momentum, but the stock’s moderate volatility means that risk management remains important.
Summary of Key Metrics as of 20 January 2026
- Net Profit CAGR: 24.08%
- Gross NPA (Quarterly): 1.50%
- Net Interest Income (Quarterly): ₹2,465.60 crore
- Credit-Deposit Ratio (Half Yearly): 88.01%
- Return on Assets: 0.7%
- Price to Book Value: 1.4
- PEG Ratio: 0.5
- 1-Year Stock Return: +16.42%
- Institutional Holdings: 65.76%
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Contextualising Yes Bank’s Position in the Private Sector Banking Space
Yes Bank operates within the private sector banking segment, a highly competitive and dynamic industry in India. The bank’s midcap market capitalisation places it among the emerging players with significant growth potential. Its recent financial results demonstrate an ability to improve asset quality and profitability, which are critical factors in a sector often challenged by credit risks and regulatory pressures.
Compared to its peers, Yes Bank’s valuation metrics suggest it is trading at a discount, which may attract value-conscious investors. The combination of a strong institutional investor base and positive technical indicators further supports the stock’s appeal. However, investors should be mindful of the broader economic environment and sector-specific risks that could impact future performance.
Looking Ahead
Investors considering Yes Bank should monitor upcoming quarterly results and macroeconomic developments that could influence credit growth and asset quality. The bank’s ability to sustain its profit growth and maintain low NPAs will be key determinants of its future rating and stock performance. Given the current 'Hold' rating, a prudent approach would be to maintain existing holdings while evaluating opportunities for incremental investment as the bank demonstrates continued progress.
Conclusion
In summary, Yes Bank Ltd.’s 'Hold' rating by MarketsMOJO reflects a balanced view based on its average quality, fair valuation, positive financial trends, and bullish technical outlook. The stock offers a reasonable risk-reward profile for investors seeking exposure to the private banking sector with moderate growth expectations. Staying informed on the bank’s evolving fundamentals and market conditions will be essential for making well-timed investment decisions.
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