JAMMU & KASHMIR BANK

The state might be facing great turmoil but this bank seems to be doing not just fine but very fine. While the rest of the sector grappled with sustaining margins, J&K Bank, is all set to achieve a net profit target of Rs.1000 crore and business target of Rs.100000 crore by FY13. For 9MFY13, the bank has already posted a net profit at Rs.805 crore, up 35% on YoY. And with one more quarter to go, with the average profit per quarter being in the range of Rs.250-270 crore, it is sure to hit the Rs.1000 mark net profit in FY13. Asset quality remains good with Gross NPA at 1.61% v/s 1.59% and Net NPA at 0.14% v/s 0.16% on QoQ. Provision coverage ratio is at 94.21%, up from 93.30% in Q2 and well above RBI stipulated norm of 70 %.

The equity of the bank is very small at Rs.48.49 crores with face value of Rs.10. As at 31-12-12, Jammu & Kashmir state held 53.17% stake of the bank, while FIIs held 24.56% in Q2, it has come down marginally to 24.28% in Q3. The bank is the first in the country being state owned bank and termed as private sector bank. In FY13, the bank hopes credit to show a growth of 25%. It hopes to increase lending to tourism, infra and lending to apple growers by five-fold over the next two years. The stock remains strongly in the green and more so on that back of these very strong numbers, especially when others are still grappling to survive. It is surely a value pick for the long term.