J&KBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | J&KBANK | Market Cap | 11,215 Cr. | Current Price | 102 ₹ | High / Low | 117 ₹ |
| Stock P/E | 5.22 | Book Value | 143 ₹ | Dividend Yield | 2.11 % | ROCE | 6.14 % |
| ROE | 15.7 % | Face Value | 1.00 ₹ | DMA 50 | 103 ₹ | DMA 200 | 104 ₹ |
| Chg in FII Hold | 0.29 % | Chg in DII Hold | 0.08 % | PAT Qtr | 587 Cr. | PAT Prev Qtr | 494 Cr. |
| RSI | 47.7 | MACD | 0.52 | Volume | 17,55,264 | Avg Vol 1Wk | 32,73,660 |
| Low price | 82.0 ₹ | High price | 117 ₹ | PEG Ratio | 0.09 | Debt to equity | 10.0 |
| 52w Index | 56.4 % | Qtr Profit Var | 10.4 % | EPS | 19.5 ₹ | Industry PE | 15.8 |
📊 Financials: J&KBANK demonstrates mixed fundamentals. ROE at 15.7% is strong, reflecting efficient equity utilization, while ROCE at 6.14% is modest. Debt-to-equity ratio of 10.0 highlights a highly leveraged balance sheet, typical for banks but still a risk factor. Quarterly PAT improved from 494 Cr. to 587 Cr., showing healthy growth momentum with a profit variation of 10.4%. EPS of 19.5 ₹ supports earnings consistency, and dividend yield of 2.11% adds shareholder value.
💹 Valuation: Current P/E of 5.22 is significantly below the industry average of 15.8, suggesting undervaluation. P/B ratio is ~0.71 (Current Price / Book Value), which is attractive. PEG ratio of 0.09 indicates strong growth potential relative to valuation. Intrinsic value appears higher than CMP, offering a margin of safety for investors.
🏢 Business Model & Competitive Advantage: J&KBANK operates in the banking sector, with a strong regional presence and growing retail and corporate lending portfolio. Competitive strengths include low valuation multiples, improving profitability, and dividend payouts. However, high leverage and modest ROCE reduce its efficiency compared to larger peers.
🎯 Entry Zone Recommendation: Current price of 102 ₹ is near DMA 50 (103 ₹) and DMA 200 (104 ₹), reflecting consolidation. A more attractive entry zone would be around 90–95 ₹ (closer to 52-week low of 82 ₹), offering better risk-reward. Long-term investors may accumulate gradually, given undervaluation and improving profitability.
Positive
- Low P/E (5.22) compared to industry average (15.8), indicating undervaluation.
- Strong ROE of 15.7% reflects efficient equity utilization.
- Quarterly PAT growth from 494 Cr. to 587 Cr. (+10.4%).
- Dividend yield of 2.11% adds shareholder value.
- FII (+0.29%) and DII (+0.08%) holdings increased, showing institutional confidence.
Limitation
- High debt-to-equity ratio of 10.0 indicates significant leverage.
- ROCE of 6.14% is modest compared to peers.
- Current price near 52-week high (117 ₹) limits immediate upside.
Company Negative News
- High leverage raises concerns about financial risk management.
- Modest ROCE highlights efficiency challenges.
Company Positive News
- Quarterly profit growth demonstrates operational improvement.
- Institutional inflows (FII and DII) reflect investor confidence.
- Attractive valuations with P/B below 1.0.
Industry
- Banking industry P/E at 15.8 reflects moderate valuations.
- Sector growth driven by credit expansion, retail lending, and digital banking adoption.
- Government and regulatory support enhances long-term stability.
Conclusion
⚖️ J&KBANK is undervalued with strong ROE, improving profitability, and attractive valuation multiples. However, high leverage and modest ROCE remain concerns. Investors may consider accumulating near 90–95 ₹ for better margin of safety. Long-term holding could yield solid returns, supported by sector growth and the bank’s improving fundamentals.
I can also compare J&KBANK’s valuation and efficiency metrics against other mid-tier banks to highlight relative strengths and weaknesses if you’d like.