Jk Bank is the only bank who had reported profits climbing up with compare to bunch of state run banks. Many state owned bank had seen their profits slump due to increase in their provisions and contingencies account as per RBI Guidelines.

JK Bank had already started cleaning its balance sheet two quarters ahead of its state run peers. The deposits had stayed flat compare to same time last year. The loan book had grown by 5% compare to same period last year. JK bank management had come out with the guidance that they expect the NPA’s to stay high for the another two quarters and expect their loan book to grow in range of 10%-15% for the next financial year.

For the nine month period so far, the total income of the bank had been reported fallen down by 2% and its operating income before provision and contingencies had gone up by 2%. The net profits for the 9 month period had jumped 16% to Rs 472 crore.

The gross NPA’s stand at Rs 3,339.46 crore which reflects 6.81% of total loan book compare to last year they reported gross NPA’s of Rs 2658 crore which reflect 5.80% of total loan book. The good news is that their net NPA’s this year so far stand at Rs 1,215 crore which reflect 2.6% of loan book compare to Rs 1,428 crore which reflect 3.22% of loan book last year.

Valueoperations hold JK bank shares in its portfolio and we are holding this stock, as to our analysis it is trading at discount to its materially estimate of intrinsic value and in coming quarters once the NPA pain comes under control we do expect its profits to grow substantially. In saying that we are closely keeping eye on its NPA’s and if fundamentals change then will also our valuations.

Aziz Dodhiya is the chief investment officer for the Valueoperations funds which operates in the Indian market as an FPI (Foreign Portfolio Investor). We do not offer any personal advice to buy or sell any stocks and the views that are shared by Aziz might not incline to your personal investment strategy and this is the reason we advise to take professional advice before going ahead with our views.