Shares of private sector lender Yes Bank staged a sharp intraday recovery during morning trade on Thursday, advancing nearly 2% to cross the ₹16 mark after opening at ₹16.04 against the previous session’s close of ₹15.73. The relief rally comes at a time when global brokerage heavyweight JPMorgan maintained a cautious stance on the lender, reiterating an “Underweight” rating while trimming its target price by approximately 38% from ₹21 to ₹13.10 per share. With the bank commanding a market capitalization hovering near ₹50,000 crore, market participants actively stepped in to accumulate shares at discounted levels, balancing long-term valuation resets against lingering headwinds stemming from the legal outcome on Additional Tier-1 (AT-1) bonds.
JPMorgan Flags ₹1,820 Crore Profit Blow and 240 Bps Capital Hit on AT-1 Bonds
The cautious commentary from JPMorgan centers heavily on the financial implications of the Supreme Court’s ruling regarding the lender’s written-off AT-1 bonds. According to the brokerage’s proprietary projections, resolving these instruments could exert a net bottom-line drag of approximately ₹1,820 crore on FY27 profits alongside an estimated contraction of 240 basis points in the bank’s Common Equity Tier-1 (CET-1) capital adequacy ratio. Analysts at the brokerage further cautioned that if mandatory coupon servicing on these hybrid debt instruments is reinstated, recurring interest disbursements would create prolonged margin headwinds through FY28 and FY29, dampening return ratios and operational profitability over the medium term.
Value Hunting at 52-Week Lows Meets a 65% Q2 Profit Spike
Despite institutional caution, retail and domestic investors found several compelling reasons to trigger fresh buying momentum on Dalal Street. Having tumbled nearly 30% over the trailing twelve months and taking a sharp beating following the apex court’s verdict, the stock entered deep oversold territory, prompting opportunistic bottom-fishing by value investors. Sentiment was further bolstered by Yes Bank’s robust operational performance in the second quarter of FY27, where standalone net profit jumped 65% year-on-year to touch ₹1,080 crore, underpinned by healthy expansion in net interest income. While the reported quarterly numbers did not incorporate the potential liabilities of the bond dispute, market consensus increasingly views the apex court’s October ruling as largely discounted into current market prices, allowing core operational improvements to drive the morning rebound.