J&K 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. It posted a net profit of Rs 516 crore in H1FY13. Its asset quality, unlike others has improved and at end of Q2FY13, Gross NPA was at 1.59% v/s 1.6% and Net NPA was at 0.16% v/s 0.14% (QoQ). NPA Coverage Ratio at 93.30 % 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 30-09-12, Jammu & Kashmir state hold 53.17% stake of the bank, while FIIs hold 24.56%. 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 has been virtually hitting a new high everyday on the back of these very strong numbers, especially when others are still grappling to survive. It is surely a value pick for the long term.