हिंदी – Yes Bank Stock update . Right time to invest ?


Hello investors , my name is Sagar and in this video we’ll talk about Yes bank We will understand why their shares are falling , their business model and valuations I will also tell if I would invest in this company or not Before starting the video , I would like to mention that I already made a video on Yes bank, where I talk about the management and business model I will leave a link in the description and above So let’s start with this video. I want to start with their history first . In the past, Yes bank was able to grow at a very fast rate and their shareholders were able to get great returns as well I would like to mention that I always found it expensive but they still gave decent returns But I want to explain how were they able to grow at such a fast rate. As this is is a financial company , more than 60 % of their advances are from Corporate banking In the past , Yes bank was majorly known for their Corporate banking . Let’s understand their secret. Normally when a financial company is giving a loan , they like to give it strong companies with very good earnings but Yes bank had a different strategy. This bank used to give loans to companies which were not so stable and sometimes they were very distressed companies Imagine you run a company which is going through some hard times and I offer you a loan. You will probably accept my loan because you need the money to run the business as a consequence, I will be able to charge a higher interest rate because other banks won’t even consider giving you a loan so risky Keep in mind that your business isn’t doing so well so you might not be able to make the repayments and that’s why Yes bank was able to charge a higher interest In this case, they were able to give such loans and recover the repayment as well That’s the reason why Yes bank was able to grow so fast. There is one more detail. The is one section in Corporate Banking known as Structured finance. A normal loan is a very simple product such as home loans but the loans they make for big corporations are very complicated they are tailored to their needs. Yes bank is very strong in this segment. Normally , when they were providing structured finance , they would recognize the entire fee in the first payment. The new CEO has decided to change this and now they will take this fee in various tranches. Before , they would recognize the entire fee in one step. So they have changes some accounting principles because the companies also pay you in various tranches. Let’s talk about the second change. Yes Bank always had some issues with NPA’s. NPA stands for non-performing assets. As I explained before , this is a financial company which gives loans. if you aren’t able to recover the payment in 90 days , it will be classified as NPA. because if you are not able to collect anything from that loan , it’s not performing for you and that’s why it’s known as non – performing assets. So , if you check their past , in 2016 they reported NPA’s of 748 crores but when RBI did their study , they realized that the actual number of NPA was 4926 crores. So that means there was a big difference between what the bank had said and what the RBI had found. This difference is known as divergence. So if I take the RBI number and remove the Yes bank number , I get 4176 crores of divergence. In 2017 , the divergence was even higher. It was 6355 crores. This means that Yes bank reported one number but the reality was something else. Now you might be saying , that’s past numbers but what about current numbers. In 2018 , everyone thought that everything bad is already known and now it will be fine but as I explained in my previous video , the new CEO came in and in this quarter, they have issued a watch list This is simply because they have identified some companies which don’t have good free cash flows and they might not be able to recover back the money That’s why they are tracking these companies very carefully and this will known as the watch list. The amount of this watch lisit is 10 000 crores. It’s important to know that Yes bank didn’t use to issue a watch list in the past. So the management in trying to be transparent and explain what’s happening with their loans So you might be asking , if the management is being transparent then why are their shares falling ? In the past , many banks have issues watch lists but in the next quarters , this watch list would get bigger and bigger So many people think that something similar is going to happen with Yes bank . They think their watch list will get bigger and bigger I’m not saying that this will happen but it’s what many people think because it has happened in the past. Now they have kept some money aside (2 100 crores ) for this watch list, known as provisions. As it’s a very big watch list of 10 000 crores , so they decided to keep 2 100 crores aside. but these provisions are just for the watch list , if you see the entire provisions created in the last quarter , it’s 3 662 crores. and that’s why they reported such a big loss. They had good earnings but as they had to create such provisions , they weren’t profitable. Now you know that they have some issues with their loans. So , the brokerage firm UBS changed their targets regarding Yes bank. Their initial target for Yes bank was around 170 Rupees but after seeing the watch list , they changed their target, They issued a new target of 90 rupees which is more than 40 % lower than their initial target. Their main reason was the asset quality. The shares started falling rapidly once this report was made public. Many people like to read what these brokerage firms are writing because these people know what’s happening with the business and they are in touch with the management many times So what is the company going to do now ? The company is going to raise capital of 1 billion dollars I would like to mention that this has also happened in the past. Many banks had similar issues and once they were able to raise capital , they recovered very soon. Let’s talk about the fourth reason. Recently , two members from the board of directors have resigned due to personal reasons. but many people get scared because the board of directors know exactly what is happening with the company So they know what is happening in the bank. Many people start thinking that there is something wrong with the company when these members resign. Let’s talk about their last reason. Yes Bank disclosed that the banking regulator has appointed former RBI Deputy Governor R. Gandhi They have told him to check what’s happening with the bank Many people are worried why RBI had to do such thing ? It’s important to note that this has happened in the past. Earlier, Lakshmi Vilas Bank had RBI-appointed directors on their boards but this is not a negative thing because now Mr. Gandhi will check how the company is conducting their business So , these are five reason why their shares have been falling. Now, let’s talk about their future because not everything is negative The company has said that their growth has slowed down a bit but in the future , we expect to grow between 20 – 22 % Some of their segments are performing very well. Currently , they depend a lot on Corporate banking. As I’m showing you in the image , 65 % of their loans are in the Corporate Banking segment. The rest is in retail and small enterprises. The company has said that we want to achieve a balance of 50 – 50 % . they want 50 % from Corporate baking and 50 % from retail and small enterprises. but they are excited about two segments. The first one is transaction banking. The new CEO is very good in this segment. It is the side of banking that addresses the operational needs and day-to-day transactions of business such as cash management They think they will be able to scale that business quickly . The second segment is retail banking. As you can see in the image, before it was 12 % of their total advances now it’s more than 16 % of their total advances . So you can see they are scaling this business but there is one small issue. Only 30 % of their retail branches are profitable but they expect this number to reach 80 % . So you can see they want to focus more on retail because they can scale this and the risk is less than corporate banking But I want to share one fact, which I don’t see anyone talking about. Yes bank commands the highest market share in the UPI person-to-merchant payment transactions. Let me explain why this is important. UPI transactions are very fast and they charge a very small fee but the most important part is that with each transaction , you get more data. The bank is able to access the transacting individual’s name, mobile number, bank account, transaction value and merchant name. In my last video, I explained how Bajaj Finance is able to use this data. In this case, they can use the database for conducting analytics in order to carry out credit assessment for offering various retail loans As you can see in the image , in just one year , the number of transactions have grown by more than 800 % Now , let’s talk about valuations and if I would invest in this company or not. They want to focus more on retail now but I still have two issues. Firstly, even I don’t know if the watch list is going to get worse or no The reason I say this is because in my last video I mentioned that I’m scared of corporate banks The reason I said that is because loans of corporate banking are very big if you aren’t able to recover one single loan , it will directly affect your income statement you will have to show losses just because of one single loan that’s why I said that I’m scared of corporate banking and I still think the same I’m not saying that these are bad banks because eventually these small companies will become bigger and they will be able to repay back the money but there is too much risk with these companies the loans we take are very small corporate loans can be more than 600 crores that’s why I’m scared and I won’t invest in the company Don’t forget to subscriber to get more videos

100 thoughts on “हिंदी – Yes Bank Stock update . Right time to invest ?

  1. Sir , this time the nifty 50 PE ratio is around 29.
    Acc. to you the time is right to invest because market is overvalued now?? Plzz ans..

  2. I dont think it is practical presentation. Two times RBI found real figures of NPAs, aiming for 1BN. Is fund raising of 1BN can achievable with current image? And how many quarters will it take to make 80% of its branches profitable. In my opinion current days are black days for it. Retailers should be very cautious to take a fresh position until they provide positive results in a quarter.

  3. News driven stock h ye.age qtr me v loss show nhi karega iska guarantee kya h?aur kis kis dubte hue company me iska paisa fasa h ye v saf nhi h avi. short term me aur gir sakta h.but kuch salo ka view rakhe to avi k liye valuation sasta h agar bara risk lene ka mentality h to

  4. Hey! Love your videos. I've heard you mentioned on a couple of occasions that you've invested in stocks in foreign markets as well. Curious to know how you do that

  5. Respected sir, I want to know detailed business model som distallaries and breweries ltd. Company

  6. 12:00 hmm , I like for these reasons only ! Was my reason initially ! But beech me ye faltu cheezen aagayin and got so many loss !

  7. Sagar sir amazing insight on the yes bank stock there has been some risky exposure at corporate level and recently all bad news has come all the way in which stock reacted too much, it becomes much cheaper for fII and DII while impacted retail investors

  8. Sir i have my savings account with yes bank .. is this save to stay there with my savings accounts plz comment 🙏🏻

  9. Dekho bank to grow karega for sure, agar aaj rupaye nhi lagaye to Kya ok phayda aage Jake high valuation pe kharidne me.
    Stop timing the market and but wonderful companies and keep invested.

  10. Your detailed information & analysis of Yes Bank is just awesome 👌.. Thanks for sharing this informative video 🙏❤️

  11. I don't understand everyone seeing yes bank good opportunity and investing in same.. then still the prices are falling and not recovering..why this volatility

  12. Reliance capital 3000 se 60 rupya ho gaya magar woh bhi 2000 par bhi buy call thaa 1000 par bhi aur 300 par bhi yehi haal yes bank ka bhi hain bhaiye sau baat ki ek baat bhav bhagwan hain

  13. 65% Corporate loans. Next target is Rs 60 for yes bank. These corporates have not even spared big banks.

  14. Loved your analysis
    Could u please tell me in the perspective of contra fund side is this company viable to invest?
    Valuation about 10000 cr stressed assets are the only component for this fall evn balance sheet shows some favor for the Company?

  15. Thank you sir…
    The video is explained details about yes bank.
    Before the video, i have lots of questions about yes bank , with the help of you..
    Now i can know all about the yes bank…

  16. Dr Sagar Good Evening,
    Request you to please post a lecture on significance of STOP LOSS especially w.r.t Long Term investing and Swing Trading

  17. Best video on Yesbank I found on YouTube. I was about to leave the video due to wierd accent. Thank god I didn't do it. I am now a fan.

  18. I am amazed by your explanations…you are so fluent and so clear…one question from your sincere fan sir…how are you so knowledgious…from where you get and analyse the data of stocks?…have you done any stock course?…#drsagar please reply…like the comment those who want to know the same thing.

  19. PRAKASH INDS ,NCC,Delta corpn , RITES ,
    Trident ,Mmtc,
    Nbcc,Sterlite tech ,ZEE LEARN
    Should I enter present level

  20. Muje pta tha last me aap e share leneke liye nhi khoge… hmara time waste or data bhi. Sir jo share lena he vahi btavo.5000company me bhut company investment ke layak nhi he kya sbka video bnawoge?

  21. hey man you r the best analyst I have ever seen….. will you tell me where I will get this all information about stocks….?

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