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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