Banks play a significant role in the Indian economy and there are countless banks operating in India that seek investor action and share in the market. Two key players of this market are State Bank of India (SBI) and Yes Bank. With a view to providing a clearer idea about the current position and possible evolution of these banks, we are going to compare their share values based on some factors.
1. Current Share Price and Market Capitalization:
With Yes Bank share price trading at ₹22.86, it is indicating a little rise of 0.40%. Yes Bank belongs to the mid-cap group of banks having a market value of ₹71,439.55 crores.
SBI’s shares, on the other hand, are worth ₹797.05, indicating a 0.01% decline. SBI is a large-cap stock on the Indian market, solidly cementing its place with a market value of ₹7,07,677.10 crores.
2. Price-to-Earnings (P/E) Ratio and Valuation:
At 49.54, Yes Bank’s P/E ratio is now much higher than the industry average of 14.30. This high ratio implies that Yes Bank shares are selling for more money than the company makes.
The average P/E ratio of SBI is 10.43 which is lesser than the average P/E ratio of industry. Lower ratio meant that SBI’s shares could be more fairly valued comparatively to the profits of the bank and thus yields a better deal to investors.
3. Recent Financial Performance:
The latest financial statements for Yes Bank indicate a steady increase in profitability. The overall capital adequacy ratio of the bank also has a good shape of financial health with ₹228.64 crores of net profit in September 2023 to ₹516.00 crores in June 2024.
The SBI seems to appear much more substantial with its net earnings of ₹16,383.18 crores to ₹ 21,736.47 crores. This impressive result has placed solid position for SBI as one among leading players in the banking sector of the Indian economy.
4. Shareholding Patterns and Investor Confidence:
The ownership structure of Yes Bank is diversified, as seen by its shareholding pattern. As of June 2024, the public owned 34.61% of the shares, Domestic Institutional Investors (DIIs) held 38.32%, and Foreign Institutional Investors (FIIs) held 27.07%. Notably, no promoter holding is present.
Strong government backing is seen in SBI’s ownership pattern; as of June 2024, the Government of India had a 57.54% stake. A more stable ownership structure was indicated by the fact that FIIs controlled 11.16% of the shares, DIIs held 23.61%, and the public retained 7.7%.
5. Historical Performance and Future Outlook:
Yes Bank has been facing several operational challenges recently, with nearly complete failure in 2020. The bank has, however, shown some signs of revival; its stock has traded between ₹ 15.70 and ₹ 32.85 in the last 52 weeks so it could go up higher once again.
SBI has been quite stable; the SBI share price has been from ₹543.20 to ₹912.00 in the last 52 weeks. This shows that there is possibility of a stable future given government support and the fact that the bank occupies a dominant share of the market.
Conclusion
Two different narratives about India’s banking industry may be seen in the contrast between Yes Bank and SBI share prices. After a turbulent era, Yes Bank is showing indications of revival, but it is still difficult to win back investor trust. Investors may see potential for future growth based on its higher P/E ratio, but this comes with a higher risk.
