⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
J&KBANK - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.0
📊 Financial Overview
- Profitability: PAT grew slightly QoQ from ₹485 Cr to ₹494 Cr, though YoY variation is -10.3%.
- Return Metrics: ROE at 15.7% is strong, while ROCE at 6.14% is modest.
- Valuation: P/E of 5.57 is significantly below industry average (14.6), indicating undervaluation.
- P/B Ratio: With a book value of ₹138 and price of ₹106, P/B is ~0.77, suggesting deep value.
- PEG Ratio: 0.09 reflects strong growth potential relative to earnings.
- Debt Profile: Debt-to-equity ratio of 10.2 is high, typical for banks but worth monitoring.
- Momentum: RSI at 50.8 and MACD at 0.97 indicate neutral sentiment with potential for upside.
🏢 Business Model & Competitive Edge
- J&K Bank operates as a regional bank with strong presence in Jammu & Kashmir and Ladakh, offering retail and corporate banking services.
- Its strategic positioning and local dominance provide a competitive moat in its core geography.
- Improving asset quality and digital banking initiatives support long-term growth.
💡 Entry Zone Recommendation
- Current price is near DMA 50 and DMA 200, indicating consolidation.
- Suggested Entry Zone: ₹100–₹106 for accumulation.
- Long-term holding viable given strong ROE and undervaluation.
✅ Positive
- Low P/E and P/B ratios suggest attractive valuation.
- Strong ROE of 15.7% indicates efficient capital use.
- Dividend yield of 2.00% adds income appeal.
⚠️ Limitation
- High debt-to-equity ratio (10.2) typical for banks but needs monitoring.
- Decline in FII and DII holdings may reflect cautious institutional sentiment.
- Quarterly profit variation of -10.3% signals earnings volatility.
📉 Company Negative News
- Minor decline in institutional holdings (-0.16% FII, -0.11% DII).
- Volume and RSI suggest lack of strong momentum.
📈 Company Positive News
- Consistent PAT growth QoQ and strong ROE performance.
- Digital banking expansion and improving asset quality outlook.
🏭 Industry
- Banking sector benefits from rising credit demand and digital transformation.
- Industry P/E of 14.6 highlights J&K Bank’s undervaluation.
🧾 Conclusion
- J&K Bank is a fundamentally strong regional bank trading at attractive valuation levels.
- Entry near ₹100–₹106 offers a favorable long-term opportunity.
- Monitor debt levels and institutional sentiment for sustained performance.
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