What are your suggestions about Yes Bank shares for the next 3 months?

Investing in the stock market involves making informed decisions based on various factors, including company performance, financial health, and market trends. When it comes to Yes Bank shares, the outlook for the next three months is worth considering. While a short-term period of three months is unlikely to see major magic changes in stock prices, there are several crucial factors to take into account.

Current Trading and Technical Analysis

Yes Bank is currently trading around RS: 14.25, a level that appears to be technically weak. The stock has been facing challenges, having fallen significantly over the past few years, from RS: 4002 to the current RS: 15-20 range. This trend has been consistent for the past two years, indicating a potential lack of momentum for the stock. For traders, the strategy might be to accumulate more stocks at lower dips, specifically around RS: 8-10, and exit around RS: 16, keeping a careful watch on the situation.

For investors, the advice might be to accumulate at levels below RS: 10, although there is no clear indication of a significant turnaround in the stock's performance. It is crucial to consider multiple factors before making an investment decision.

Problems and Challenges

Yes Bank is currently facing several challenges that can affect its stock performance:

Non-Performing Assets (NPAs)

The bank has given loans to unworthy individuals and bankrupted entities, such as Anil Ambani, Vijay Mallya, and the Essar Group. These actions have eroded the trust in the bank, leading to a substantial problem with NPAs.

Capitalization and Liquidity Issues

Due to the loss of trust from its former CEO, Rana Kapoor, Yes Bank is experiencing a capitalization problem. The bank also faces liquidity issues, which can hinder its operations and performance.

Financial Performance

The stock survival of Yes Bank is largely based on news rather than actual business performance. This is evident in the financial performance indicators, including declining ROE (Return on Equity), ROA (Return on Assets), and cash flow from operations.

Financial Indicators

Key performance indicators (KPIs) showing the decline in Yes Bank's financial health include:

Negative breakdown of the balance sheet Efficient use of shareholder funds (declining ROE) Inefficient use of assets to generate profits (declining ROA) Poor cash generated from core business (declining Cash Flow from Operations) Declining net cash flow and cash from operating activities over the last two years Revenue and profit growth decline in the last two years Decline in quarterly net profit and falling profit margins

These financial challenges are further compounded by the bank's high debt levels and no growth in recent revenue and profit results.

Conclusion

While the stock of Yes Bank appears to be technically weak, the long-term outlook is also concerning. For short-term traders, the current dip might provide an opportunity, but for investors, caution is advised. It is important to conduct thorough research and consider various factors before making any investment decisions in Yes Bank shares.