Most of the quality business that we follow and intend to invest are trading at premium prices. To put in numbers we think only eight of one hundred quality business are trading at discount.

We always advocate to invest in the good quality business and we still think that JK bank is the investment quality bank after all the episodes of NPA and things came out publically about it.

JK Bank had reported profits of Rs 354 crore compare to last year 302 crore. That is a very impressive growth compare to last year results. But we are not impressed or for us it is irrelevant for Indian banks.

We think that those reported profits are just outcome of accounting system that we follow and do not reflect the potential or real profits of the banking industry. The advances and deposits had hardly changed in the last year and the chairman of the bank did mentioned about cleaning and consolidating its balance sheet and improving its deposit mix and enhancing its provision.

Whatever profits they are reporting they are provisioning almost same amount (Rs 340 crore for the first half 2016) and are expecting to be out of this crisis in next 3 -4 quarters.

We do think they are trading at almost fair price for its 2016 valuations but same time we think that they will double their 2016 earnings in the next two years and that consideration reflects that it is trading at discount to its 2017 and 2018 earnings.

Over here we would like to add disclaimer that we hold JK Bank in our portfolio and we do review our holdings time to time and our views can change in the future for this bank. Please do your own due-diligence and seek professional advice before investing in this business.