Yes Bank extends fall as Goldman cuts target to ₹17

Limited(YESBANK) fell 1.24% on October 21, touching a low of ₹16.37, after Goldman Sachs cut its target price to ₹17 from ₹22 and kept its Sell rating. The stock has now fallen for four straight sessions, losing 21.32% over that period. Goldman also cut its FY27 earnings estimate by 130%, which means it now expects Yes Bank to post a loss for the year instead of a profit. The downgrade follows the Supreme Court's October 15 ruling, which upheld the Bombay High Court's decision to cancel the write-off of ₹8,415 crore of Additional Tier-1 (AT1) bonds from the bank's 2020 rescue. Trading was heavy today, with over 5.25 crore shares changing hands. The ruling changes the bank's financial picture. Yes Bank must now honour these bonds at their original coupon rates of 9.5% and 9%. That brings back an obligation that had been written down to zero six years ago. It could hit profits, capital and possibly require fresh funding, depending on how the payout is structured. The stock has already fallen below Goldman's ₹17 target, so the selling may have run ahead of the downgrade. Still, the market is pricing in the worst case before the bank has explained the actual impact. The original bond amount, any immediate cash payment and the charge against profit are three different things, and none has been confirmed. The core business is still growing, with loans and advances up 4.3% sequentially to ₹2,85,315 crore. Investors should watch the bank's disclosure on how it will account for the AT1 liability, the impact on capital adequacy, any need to raise fresh capital, and Q2 FY27 results. The key question is whether the hit is a one-time accounting charge or a lasting drag on capital and earnings. Disclosure: I do not hold any position in Yes Bank Limited. This post is for informational purposes only and is not investment advice.