RBI Policy under 4 years of Modi: Indian stock markets have performed relatively well as compared to the emerging market economies with key equity indices Sensex and Nifty returning 38-41% following the rise in the share price of heavyweight stocks such as RIL, Maruti Suzuki, HDFC Bank, HUL.
RBI Policy under 4 years of Modi: Indian stock markets have performed relatively well as compared to the emerging market economies with key equity indices Sensex and Nifty returning 38-41% following the rise in the share price of heavyweight stocks such as RIL, Maruti Suzuki, HDFC Bank, HUL. While there is a share of a private bank that has tripled in the corresponding period vastly outperforming the headline indices and the benchmark Nifty Bank and Nifty Private Bank indices, respectively.
Shares of the Mumbai-headquartered India’s fifth-largest private bank by asset size Yes Bank have nearly tripled in the course of last four years of the Monetary Policy of the Reserve Bank of India (RBI) under the leadership of Prime Minister Narendra Modi. In the meantime, the Reserve Bank of India has slashed the repo rates by 200 basis points to 6% from 8% in the last four years from June 2014.
As far as the stock returns are concerned, the Rana Kapoor-led private lender Yes Bank have outperformed the industry giants such as Aditya Puri-led HDFC Bank, Uday Kotak-controlled Kotak Mahindra Bank, Chanda Kochhar-led ICICI Bank and Shikha Sharma-led Axis Bank. The stock of Yes Bank has advanced 190% to Rs 336.65 from a share price level of Rs 115.99. While, on the other hand, the 4-year stock returns of HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank stood at 153%, 5%, 35% and 189%, respectively.
The domestic research and brokerage firm Motilal Oswal Securities has a ‘buy’ rating to the stock of Yes Bank with a target price of Rs 444 which implies an upside of 32% from the current market price of Rs 336.65.
Also, Yes Bank has the lowest gross NPAs (in relative terms) as against HDFC Bank (India’s largest private bank), ICICI Bank (Second-largest private bank), Axis Bank (third-largest private bank) and Kotak Mahindra Bank (fourth-largest private bank). At the end of the financial year 2017-2018, the gross NPAs of Yes Bank was at 1.28% while ICICI Bank’s were at 8.84%, Axis Bank’s were at 6.77% and Kotak Mahindra Bank’s were at 1.95%. Interestingly, the gross non-performing assets of country’s second-largest bank by assets HDFC Bank were at 1.3% of the total loans and advances.
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