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Yes Bank just surprised the street. On May 9, the stock shot up nearly 7 per cent to Rs 19.46 on the BSE. The spark? A one-two punch of solid FY25 earnings and speculation that Japanese banking giant SMBC might pick up a big stake in the lender.
For a stock that's mostly been written off by many in recent years, this move turned heads.
What does Yes Bank do again?
In case you've tuned out Yes Bank since its fall from grace — here's a quick refresher.
It's a private sector bank that caters to retail and corporate clients. After nearly collapsing in 2020 due to bad loans and governance issues, it was bailed out by a State Bank of India-led rescue. Since then, the bank has been trying to get its mojo back.
What triggered the surge?
1. Profits nearly doubled
The bank reported a 92 per cent jump in net profit for FY25, reaching Rs 2,406 crore. Asset quality also improved, with gross NPAs dropping to 1.6 per cent. After years of clean-up, that's a big step in the right direction.
2. SMBC acquisition rumours
Multiple reports suggest that Sumitomo Mitsui Banking Corporation (SMBC), which already owns a small stake, may be looking to raise it significantly. That's fueling hopes of a fresh capital infusion and global expertise joining the table.
Put together — improving numbers + foreign interest = bullish sentiment.
Value Research ratings and other metrics
Let's look at the numbers:
- Price-to-earnings (P/E): 25
- Return on equity (ROE): Just 3.2 per cent
- Stock rating on Value Research:
- Quality: 2/10
- Growth: 3/10
- Valuation: 7/10
- Momentum: 2/10
Final word
Yes Bank's 7 per cent rally is no fluke — it's backed by earnings and the prospect of strategic backing. But don't forget the stock's baggage. A stake sale to SMBC could change the game, but until that's official, stay level-headed.
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Disclaimer: This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.
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