Feb 10, 2017 04:44 PM IST | Source: Moneycontrol.com

Buy Jammu & Kashmir Bank; target of Rs 80: ICICI Direct

ICICI Direct is bullish on Jammu & Kashmir Bank has recommended buy rating on the stock with a target price of Rs 80 in its research report dated February 08, 2017.

Buy Jammu & Kashmir Bank; target of Rs 80: ICICI Direct

ICICI Direct's research report on Jammu & Kashmir Bank

The bank dominates its home state with 65% market share (both deposit and credit). Similarly, 77% of the bank’s deposit is funded from J&K that guards the bank, to a certain extent, from deposit pricing competition. Within J&K, the bank has 53% CASA ratio and earns lucrative NIM of 6%+ in the state.

Outlook

Though we have halved our FY18E PAT estimates led by credit growth moderation and higher credit cost, healthy recovery is anticipated. Therefore, we revise our target price upwards at Rs 80 from Rs 68 earlier, assigning higher multiple at 1.6x FY18E P/ABV. Consequently, we revise our recommendation on the stock from HOLD to BUY.

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