Highlights

• Despite a 20% one-year stock rally, consensus analyst rating stays at “Sell” with an average target implying ~17% downside.
• Most domestic brokerages flag downside risks, while only a few maintain Buy/Hold calls.
• Q3FY26 profit growth, margin expansion and balance-sheet stability highlight a clear disconnect between performance and analyst outlook.

Yes Bank Ltd (NSE:YESBANK) continues to command attention on Dalal Street, not just for its operational momentum but for the sharply divided views among equity analysts. Trading at INR 22.84 on January 19 at 11:37 am, the stock was down 2.64% on the day, even as it remains up 20.66% over the past year and 6.28% on a year-to-date basis.

The consensus stance across brokerage coverage remains tilted towards caution. As per the Refinitiv data, the average recommendation stands at “Sell”, with the aggregated target price hovering around INR 19.01, implying a potential downside of nearly 17% from current levels. This suggests that while the market has rewarded the stock over the past year, analysts remain unconvinced about sustained upside at prevailing valuations.

Brokerage Ratings Reflect a Split Street

A closer look at individual analyst calls reveals a fragmented narrative. Several domestic brokerages including Anand Rathi Securities Private Limited, JM Financial Institutional Securities Limited and Emkay Global Financial Securities Ltd, continue to maintain sell-oriented recommendations, assigning price targets ranging from INR 12 to INR 19. These targets indicate expectations of consolidation or retracement from current levels.

At the same time, a minority of analysts including ICICI Securities Limited and Axis Capital Limited have adopted a more constructive stance. Select institutions have reiterated “Buy” or “Hold” ratings, with optimistic price targets extending up to INR 28. However, these positive calls remain outnumbered, making them exceptions rather than the rule.

Overall, the analyst community appears to be pricing in a cautious medium-term outlook, even as acknowledging the bank’s recent progress.

Ratings vs Performance: A Visible Disconnect

The contrast between analyst ratings and recent financial performance is striking. Yes Bank has delivered a favourable profitability momentum in Q3FY26, with net profit rising sharply on both a year-on-year and quarter-on-quarter basis. Key metrics such as return on assets, net interest margin, and operating profit have all shown sequential improvement, reinforcing the perception of operational stability.

Profitability and Return Metrics
YES Bank reported a robust financial performance in Q3FY26, marked by a sharp improvement in profitability. The bank posted a profit after tax of INR 952 crore, reflecting a strong growth of 55.4% year-on-year and 45.4% quarter-on-quarter. Adjusted for the one-time gratuity impact, PAT stood at an impressive INR 1,068 crore, up 74.4% YoY. Return on Assets improved to 0.9% compared to 0.6% in both Q3FY25 and Q2FY26, while the adjusted RoA further strengthened to 1.0%, highlighting improved earnings quality and balance sheet efficiency.

Margin Expansion and Operating Efficiency
Net Interest Margin for the quarter expanded to 2.6%, supported by a sustained reduction in the cost of deposits to 5.6%, down 50 basis points YoY and 10 basis points QoQ. Non-interest income rose 8% YoY to INR 1,633 crore, contributing to higher operating leverage. Adjusted operating profit increased 28.7% YoY and 7.1% QoQ to INR 1,389 crore, while the adjusted cost-to-income ratio improved significantly to 66.1%, reflecting enhanced cost discipline.

Balance Sheet Growth and Deposit Momentum
The bank continued its steady balance sheet expansion, led by healthy growth in retail and branch-led deposits, which rose 9% YoY to INR 1.73 lakh crore. CASA deposits grew 8.5% YoY, reinforcing a stable and low-cost funding base. Net advances increased 5.2% YoY, supported by total disbursements of INR 26,982 crore, with retail disbursements growing around 15% YoY.

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