Yes Bank Riding On the Wings of Ambitions

To play the ambitions right is the key to reaching the heights one has never been to. Yes Bank has proved it right on many occasions. The bank must have played it right to get Yes Bank share price trade on new one year high on four straight trading days. The stock traded on a new year high of Rs. 1324.70 on 18^th August, broke it on 19^th by trading at a new high of Rs. 1339, remade a new high of Rs. 1349 on 22^nd and redid the stunt of trading on a new year high of Rs. 1350 on 23^rd August.

And the credit goes to:

The ‘credit’ in the picture refers to the Credit card segments where Yes Bank made its foray with a bang. The Banks has launched seven credit cards in partnership with Mastercard for boosting its retail banking business. The cards are put in two categories: The Yes prosperity range with five credit cards and Yes First Range for its HNI customers with two credit cards. The Bank is offering high interest rates on savings and lowest on credit cards in the industry of 1.2% per month against the industry average of 3.2%. Yes Bank is targeting to be the third largest credit cards player in the market in four years time. The Bank has taken the challenge for seeking the customers from outside for their unsecured lending product while all the other banks are playing safe by sticking to their own customers.

The current penetration in the credit card segment of the market is 2%, which is expected to be 5% in next five years. The skew of 3% growth has provided the opportunity for the new players and Yes Bank has grabbed it right on time.

Fast and Furious with QIP:

Yes Bank has the capital adequacy ratio of over 15% with their core tier I ratio slightly above 10.3%. In these numbers, the bank is viewing opportunities of growth. There are enough signs indicating the growth opportunities for the Bank. The tailwinds of monsoon and the macroeconomic stability will help the Bank in gaining market share. There is also a momentum in loan growth, which stood at 30% in the March quarter while increased to 33% in the June quarter.

The Bank has a fairly intact growth story for the next four years till 2020. The good dose of capital will only help them grow faster. That’s the reason the Bank is ready to raise $1bn through QIP. The market is very excited with the Yes Bank’s story and the Bank will most likely do the QIP with very, very high pedigree investors later this year.

Yes khushi: Another success story

Affordable housing is a critical key for enabling India’s socio-economic development and yes bAnk has contributed to the segment by launching Yes Khushi- the affordable housing loan that is set to cater the needs of economically weaker sections and low income group. The loan starts with Rs. 1 lakhand is available for the purchase of ready, resale, under-construction, plot plus construction, self construction on owned plots, repairs and renovations and balance transfers from other institutions. The loan can be extended for 25 years time and has no individual income norm. The loan can be obtained by anyone with the family income of starting from Rs. 9000 a month.

Beyond the boundaries:

The market is appreciating Yes Bank’s transformation series initiative. The series is launching aspiring student entrepreneurs, called student prenuers. There are many stories to prove the appreciation and fondness of people to the initiative that not only provides exposure to the real-world challenged but also offers an opportunity to interact with and learn from business leaders.

Investment Opinion

Yes Bank is the rising sun for the month and Dynamic Levels is counting on the stock for keeping up the faith of the market. After analyzing the movement of Yes Bank, we are recommending buy on the stock at Rs. 1338 with the target of Rs. 1365 and stop loss of Rs. 1312 for the month of September.