Mehabe score: 4 G Factor: 4 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 3.
Description
Jammu & Kashmir Bank (J&K Bank), incorporated in Jammu & Kashmir, India, is a publicly held banking company engaged in providing a wide range of banking services including Retail Banking, Corporate Banking & Treasury Operations.#
It is the only Private Sector Bank in the country assigned with responsibility of convening State/UT Level Bankers’ Committee (SLBC/UTLBC) meetings.
Main Points
Ratios (Q3FY21)
Capital Adequacy Ratio – 11.77%
Net Interest Margin – 3.88%
Gross NPA – 8.71%
Net NPA – 2.50%
CASA Ratio – 54.44%Site:J&KBANK
Market Cap:
Rs 2,151 cr
Price:
30.2
Trading pe:
5.02x
Book-value:
89.0/share
Div yield:
0.00 %
Earning yield:
4.87%
Face-value:
1.00/share
52week high:
33.00
52week low:
14.05
Technical Analysis
Stock trades at 30.2, above its 50dma 27.78. It also trades above its 200dma 25.03. The stock remains bullish on techicals
The 52 week high is at 33.00 and the 52week low is at 14.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.34 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.46% over past five years.
– has a low return on equity of -1.52% for last 3 years.
-Contingent liabilities of Rs.6917.56 Cr.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 20.9x. Kotak Mah. Bank trades at the industry’s max P/E of 35.04x. J&KBANK trades at a P/E of 5.02x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 6.0. J&KBANK has a G-Factor of 4 and Piotski scoreof 3.
– Average 1 month return for industry is 3.0%. The max 1- month return was given by Bandhan Bank: a return of 9.51 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1952.0 cr compared to Rs 2156.0 cr for period ended Mar 2020, a fall of 9.5%
Operating Profits reported at Rs 811.0 cr for period ended Mar 2021 vis-vis 1348.0 for period ended Mar 2020 .
Operating Margins contracted -2097.6 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 4.52 compared to Rs 0.93 for previous quarter ended Dec 2020 and Rs -4.72 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 8111.0 cr for period ended Mar 2021 vis-vis sales of Rs 8446.0 cr for the period ended Mar 2020, a fall of 4.1%. The 3 year sales cagr stood at 7.0%.
Operating margins expanded to -190.0% for period ended Mar 2021 vis-vis -1527.0% for period ended Mar 2020, expansion of 133700.0 bps.
Net Profit reported at Rs 428.0 cr for period ended Mar 2021 vis-vis sales of Rs -1183.0 cr for the period ended Mar 2020, rising 376.4%.
Company recorded a healthy Net Profit CAGR of 28.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 7.0% compared to -2.0% over the last 3 Years. – The stock has given a return of 105% on a 1 Year basis vis-vis a return of -19% over the last 3 Years. – The compounded sales growth on a TTM bassis is -4% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 136% vis-vis a compounded profit growth of 28% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has fallen for the period ended Mar 2021. The Mar 2021 fii holding stood at 3.59% vis-vis 5.85% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 28.04% vis-vis 25.85% for Dec 2020
Conclusion
– Stock is trading at 0.34 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 3.46% over past five years.
– has a low return on equity of -1.52% for last 3 years.
-Contingent liabilities of Rs.6917.56 Cr.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 27.78 and is trading at 30.2 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
