J&KBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | J&KBANK | Market Cap | 14,207 Cr. | Current Price | 129 ₹ | High / Low | 136 ₹ |
| Stock P/E | 6.61 | Book Value | 143 ₹ | Dividend Yield | 1.67 % | ROCE | 6.14 % |
| ROE | 15.7 % | Face Value | 1.00 ₹ | DMA 50 | 120 ₹ | DMA 200 | 110 ₹ |
| Chg in FII Hold | 0.21 % | Chg in DII Hold | 0.16 % | PAT Qtr | 587 Cr. | PAT Prev Qtr | 494 Cr. |
| RSI | 55.4 | MACD | 3.64 | Volume | 43,11,190 | Avg Vol 1Wk | 65,38,594 |
| Low price | 87.3 ₹ | High price | 136 ₹ | PEG Ratio | 0.11 | Debt to equity | 10.0 |
| 52w Index | 86.2 % | Qtr Profit Var | 10.4 % | EPS | 19.5 ₹ | Industry PE | 15.0 |
Financials: J&K Bank shows strong fundamentals with ROE at 15.7% and EPS of ₹19.5 supporting profitability. Quarterly PAT improved to ₹587 Cr. from ₹494 Cr., reflecting earnings momentum. ROCE at 6.14% is modest, while debt-to-equity ratio of 10.0 indicates high leverage risk.
Valuation: P/E of 6.61 is significantly below industry average (15.0), suggesting undervaluation. PEG ratio of 0.11 highlights attractive growth-adjusted valuation. Dividend yield of 1.67% adds investor appeal.
Business Model: J&K Bank operates in the banking sector with strengths in regional dominance and financial inclusion. Competitive advantage lies in its customer base and improving profitability, though leverage remains a concern.
Entry Zone: Attractive entry between ₹120–₹125 near DMA 50 (₹120). Long-term holding favorable due to undervaluation and strong ROE, but requires monitoring of debt levels.
Positive
- Low P/E (6.61) vs industry average (15.0) indicates undervaluation
- PEG ratio of 0.11 highlights strong growth-adjusted value
- ROE of 15.7% reflects solid profitability
- Dividend yield of 1.67% provides steady income
- PAT growth (+10.4%) shows earnings momentum
Limitation
- High debt-to-equity ratio (10.0) raises financial risk
- ROCE of 6.14% indicates modest capital efficiency
- EPS of ₹19.5 is moderate relative to valuation multiples
- RSI at 55.4 shows neutral momentum
Company Negative News
- High leverage may pose risks in downturns
- Debt levels remain a structural concern
Company Positive News
- Quarterly PAT improved from ₹494 Cr. to ₹587 Cr.
- FII holdings increased (+0.21%) and DII holdings (+0.16%) show institutional confidence
- MACD (3.64) supports bullish technical momentum
Industry
- Banking sector trades at higher P/E (15.0), making J&K Bank relatively undervalued
- Industry outlook remains positive with credit growth and financial inclusion driving demand
Conclusion
J&K Bank presents attractive valuations with strong ROE, low P/E, and improving profitability. Entry around ₹120–₹125 offers a favorable risk-reward opportunity. Long-term investors can benefit from dividends and growth, but must monitor high leverage and modest ROCE for sustained stability.
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