Buy Jammu and Kashmir Bank; target of Rs 76: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Jammu and Kashmir Bank has recommended buy rating on the stock with a target price of Rs 76 in its research report dated January 14, 2019.

January 15, 2019 / 11:38 AM IST
 
 
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Prabhudas Lilladher's research report on Jammu and Kashmir Bank


JKBK's earnings of Rs1.03bn (PLe:1.07bn) were in-line with expectations as provisions were flattish as envisaged on back of provisions on IL&FS exposure. Core opearting performance was encouraging with beat from NII which grew by 13% as bank booked some interest back on impaired assets helping NIMs improvement. Bank's J&K state restructured which has been the point of concern can be fully upgraded in Dec'19 but has been performing well and management expects no slippages. Valuation of 0.5x on Sep-20 ABV is undemanding given the loan growth & margins, liabilties franchise and limited asset quality impact. Even adjusting for some slippages from J&K RSA, valuation remain at comfort levels with only capital being constraint.


Outlook


Retain BUY with revised TP of Rs76 (from Rs94) based on 0.9x Sep-20 ABV.


For all recommendations report, click here


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first published: Jan 15, 2019 11:33 am

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