Buy Jammu & Kashmir Bank; target of Rs 105: ICICI Direct

ICICI Direct’s research report on Jammu & Kashmir Bank
Bottom line came in at | 30 crore compared to our estimate of loss ,  primarily led by lower - than - expected provision at | 278.7 crore  Asset quality improved sequentially with ~41 bps QoQ  decline in  GNPA ratio  at 10.79%.  The bank reported a one - time gain of | 238 crore owing to DTA , which was utilised to shore up provision  coverage ratio (PCR) . Therefore, PCR has improved ~3% QoQ at  70.26% including floating provision of | 349 crore. Restructured assets were at  | 6415 crore vs . | 6382 crore in Q4FY17.

Outlook

Factoring in fundamental strength and capital infusion of | 282 crore by J&K government, we revise our target upwards to | 105 (1.4x FY19E  ABV). Consequently, we maintain our BUY recommendation on the stock.

For all recommendations report, click here