The stock took the beating after global agencies like UBS
and Moody’s investors service downgraded the bank’s ratings. It hit nearly five-year low of Rs 107 on Tuesday.
has maintained ‘sell’ rating on the stock, citing unlikely sharp turnaround in the bank’s prospects. It expects 255/200 basis points (bps) credit costs in FY20/21, higher than the management guidance of 125 bps. NPL (non-performing loan) risks also seem higher than current expectation.
Analysts at UBS
expect more asset-quality pressure than consensus, given the bank’s higher exposure to stressed corporates and lower recognition of these loans as gross NPLs.
According to a report by IIFL, the private lender has debt exposure of Rs 7,590 crore to cash-strapped companies including Rs 3,700 crore to DHFL
as of March 2019 and Rs 550 crore in Jet Airways.
Last week, global rating agency Moody’s placed YES Bank's foreign currency issuer rating of Ba1 under review for downgrade as liquidity pressures on finance companies may negatively impact credit profile of the lender.
The stock has tanked 58 per cent in the past two months after it posted its first ever net loss of Rs 1,506 crore for the March quarter, on the back of the provisions soaring over nine times. It had posted a profit of Rs 1,179 crore in the year-ago period. In comparison, the S&P BSE Sensex remained unchanged during the said period.