J&K Bank has put in one consistent quarter after another, and the March 2013 quarter is no less an exception. It has reported 24% increase in net revenues and has announced 500% dividend on the occasion of its platinum jubilee year

The Bombay Stock Exchange (BSE) and NSE-listed Jammu and Kashmir Bank (J&K Bank) has posted net profit of Rs250.08 crore for the final quarter ended March 2013, up by 20.16% year-on-year (y-o-y) from Rs208.12 crore recorded for the corresponding period of the previous financial year. It also reported 24% y-o-y increase in net revenues for the quarter ended March 2013, from Rs1,479.81 crore to Rs1,835.71 crore. Operating profit rose 29% y-o-y, to Rs538 crore.

Earlier, Moneylife had covered the stock for the Street Beat section in the magazine (Issue dated: 13 December 2012). At that time, the stock was recommended at a price of Rs1,100 apiece. Currently the stock is quoting at Rs1,334.90 on the Bombay Stock Exchange (BSE).
Despite the good fundamentals and a string of consistent numbers over the past few quarters, J&K Bank still remains surprisingly undervalued, with its market capitalisation quoting at just 3.07 times its operating profit while its return on networth and return on capital employed both remain respectably high at 21% and 37% respectively.

Revenues recorded for the quarter ended March 2013, from treasury operations, corporate banking and retail banking stood at Rs576.88 crore, Rs690.12 crore and 707.13 crore respectively. For the same period last year, it was Rs413.91 crore, Rs587.75 crore and Rs690.54 crore. The total assets of the bank, as on March 2013, stood at Rs71,743 crore.
J&K Bank has one of the best non-performing assets coverage ratios in the country, at 94.01%, when compared to the regulatory norm of 70%, as at March 2013. During the year 2012-13, the bank has opened 70 new units thereby increasing its network to 685 while 105 ATMs were commissioned, taking their number to 613.

About the upcoming challenges, J&K Bank chairman & CEO Mushtaq Ahmad said, “Within the current economic scenario, the multiple challenges call for sustained engagement with dynamic risk-frameworks, complex work environs, building strong intra and inter-institutional relationships. We are ready to meet these challenges through strategic vision, dynamic leadership and quality human resource.”

On improving the credit-deposit ratio in the state, J&K Bank chairman said, “We do have an evolving credit policy that is working upon the rising prospect of credit offtake in the growing infrastructural needs of the state. Besides we plan to increase our small ticket-size, SME and corporate loan-book through innovative product mix for various large and niche segments of country’s economy.”

In its platinum jubilee year, the J&K Bank’s board of directors recommended special dividend of 500%, subject to the approval of shareholders at the ensuing Annual General Meeting.