Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Yes Bank Ltd. indicates a balanced stance on the stock, suggesting that investors should maintain their current positions rather than aggressively buying or selling. This rating reflects a moderate outlook based on a comprehensive evaluation of the bank’s quality, valuation, financial trends, and technical indicators. The rating was revised on 25 August 2025, when the Mojo Score improved from 45 (Sell) to 61 (Hold), signalling a more stable outlook compared to the previous assessment.
Quality Assessment: Average but Improving Fundamentals
As of 23 February 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 trajectory highlights the bank’s ability to expand its earnings base steadily over recent years. Additionally, the bank reported positive quarterly results for December 2025, including a gross non-performing asset (NPA) ratio of just 1.50%, which is notably low for the sector, and a net interest income (NII) of ₹2,465.60 crores, marking a peak in recent quarters. These indicators underscore improving asset quality and operational efficiency, which are critical for sustaining profitability in the competitive private banking sector.
Valuation: Expensive but Reasonably Priced Relative to Peers
Yes Bank’s valuation grade is currently classified as expensive. The stock trades at a price-to-book (P/B) ratio of 1.3, which is fair but slightly higher than some peers. However, this valuation is tempered by the bank’s strong earnings growth and a price-to-earnings-to-growth (PEG) ratio of 0.4, suggesting that the stock’s price growth potential is supported by its earnings expansion. Over the past year, the stock has delivered a return of 15.48%, while profits have surged by 48.4%, indicating that the market has recognised the bank’s improving fundamentals. Investors should note that despite the premium valuation, the stock is trading at a discount compared to the average historical valuations of its peer group, which may offer some margin of safety.
Financial Trend: Positive Momentum and Institutional Confidence
The financial trend for Yes Bank is positive, reflecting sustained growth and improving financial health. The bank’s credit-deposit ratio for the half-year ending December 2025 stands at a healthy 88.01%, signalling effective utilisation of deposits for lending activities. Return on assets (ROA) is recorded at 0.7%, which, while modest, is consistent with industry norms for private sector banks. Institutional investors hold a significant 66.87% stake in the company, and this holding has increased by 1.11% over the previous quarter. Such high institutional ownership often indicates confidence from sophisticated investors who have the resources to analyse the bank’s fundamentals thoroughly. This institutional backing can provide stability to the stock price and support long-term growth prospects.
Technical Outlook: Mildly Bullish but Cautious
From a technical perspective, Yes Bank’s stock is graded as mildly bullish. Recent price movements show modest gains, with a 0.33% increase on the latest trading day and a 1-week gain of 0.86%. However, the stock has experienced some short-term volatility, reflected in a 1-month decline of 2.73% and a 3-month drop of 7.07%. Despite these fluctuations, the 6-month return is positive at 8.68%, and the year-to-date (YTD) return stands at -2.64%. These mixed signals suggest that while the stock has upward momentum, investors should remain cautious and monitor market conditions closely.
Summary for Investors
In summary, Yes Bank Ltd.’s 'Hold' rating by MarketsMOJO reflects a balanced investment stance based on current data as of 23 February 2026. The bank exhibits strong long-term profit growth, improving asset quality, and positive financial trends supported by institutional confidence. While the valuation appears somewhat expensive, it is justified by the company’s earnings growth and relative discount to peers’ historical valuations. The technical outlook is mildly bullish but tempered by recent volatility. For investors, this rating suggests maintaining existing holdings while carefully evaluating market developments and the bank’s ongoing performance.
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Long-Term Growth and Profitability
Yes Bank’s long-term growth is underscored by a net profit CAGR of 24.08%, a figure that places it favourably among private sector banks. This growth is supported by prudent risk management, as evidenced by the low gross NPA ratio of 1.50% in the latest quarter. The bank’s ability to generate a high net interest income of ₹2,465.60 crores further strengthens its earnings base. These factors contribute to a solid foundation for future profitability and shareholder value creation.
Valuation Metrics in Context
While the stock’s valuation is classified as expensive, it is important to consider the context of its earnings growth and market position. The PEG ratio of 0.4 indicates that the stock’s price growth is well supported by its earnings expansion, making it attractive for investors seeking growth at a reasonable price. The price-to-book ratio of 1.3, though above one, is still below the average historical valuations of comparable banks, suggesting some valuation discipline in the current market price.
Institutional Support and Market Sentiment
The increase in institutional holdings to 66.87% reflects growing confidence from large investors who typically conduct rigorous due diligence. This trend is a positive signal for retail investors, as institutional participation often brings stability and can drive long-term stock appreciation. The mild bullishness in technical indicators complements this sentiment, although investors should remain vigilant given the recent short-term price corrections.
Conclusion: A Balanced Investment Approach
Yes Bank Ltd.’s current 'Hold' rating by MarketsMOJO suggests that the stock is fairly valued given its fundamentals and market conditions as of 23 February 2026. Investors are advised to maintain their positions while monitoring the bank’s ongoing performance and sector developments. The combination of strong profit growth, improving asset quality, and institutional backing provides a solid base, but valuation and technical signals counsel a measured approach. This rating serves as a guide for investors seeking to balance risk and reward in the evolving banking landscape.
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