Understanding the Current Rating
The 'Hold' rating assigned to The Jammu & Kashmir Bank Ltd. indicates a neutral stance for investors, suggesting that the stock is expected to perform in line with the broader market or sector averages in the near term. This rating advises investors to maintain their current holdings without initiating new positions or liquidating existing ones, pending further developments. The assessment is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals.
Quality Assessment
As of 25 December 2025, the bank maintains a good quality grade, reflecting robust operational and risk management practices. Notably, the bank demonstrates strong provisioning discipline, with a provision coverage ratio of 76.11%, which is a critical buffer against potential non-performing assets. This prudent approach to risk management enhances the bank’s resilience amid fluctuating economic conditions.
Furthermore, the company has exhibited healthy long-term growth, with net profit increasing at an annualised rate of 66.50%. This growth trajectory underscores the bank’s ability to expand its profitability over time, a positive indicator for investors seeking sustainable earnings.
Valuation Perspective
The valuation grade for The Jammu & Kashmir Bank Ltd. is currently deemed attractive. The stock trades at a price-to-book value of 0.7, signalling a discount relative to its peers’ historical averages. This valuation suggests that the market may be underpricing the bank’s intrinsic value, potentially offering a margin of safety for investors.
Additionally, the bank’s return on assets (ROA) stands at 1.2%, which is a respectable figure within the banking sector. The price/earnings to growth (PEG) ratio is 1.5, indicating a moderate valuation relative to its earnings growth prospects. These metrics collectively suggest that while the stock is attractively priced, investors should weigh this against other factors before making investment decisions.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend Analysis
The financial trend for the bank is currently flat, reflecting a period of stabilisation after recent fluctuations. The latest quarterly results for September 2025 show a net interest income (NII) of ₹1,433.99 crore, which is the lowest in recent quarters. Profit after tax (PAT) for the quarter stood at ₹494.11 crore, representing an 8.1% decline compared to the average of the previous four quarters.
Despite this short-term softness, the bank’s year-to-date (YTD) return is -1.57%, and over the past year, the stock has delivered a modest positive return of 1.15%. Meanwhile, profits have increased by 3.4% over the same period, indicating some underlying resilience in earnings despite market headwinds.
Technical Outlook
The technical grade is assessed as mildly bearish, signalling some caution from a price momentum perspective. The stock has experienced a decline of 0.75% on the most recent trading day, with negative returns over one week (-1.29%), one month (-4.48%), three months (-4.81%), and six months (-6.94%). These trends suggest that the stock is facing short-term selling pressure, which investors should monitor closely.
However, the modest positive return over the last year and the attractive valuation metrics may provide a counterbalance to the technical weakness, supporting the rationale for a 'Hold' rating rather than a more negative stance.
Shareholding and Market Capitalisation
The Jammu & Kashmir Bank Ltd. is classified as a small-cap stock within the private sector banking space. The majority shareholding remains with promoters, which often implies a stable ownership structure and potential alignment of interests with minority shareholders.
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What This Rating Means for Investors
For investors, the 'Hold' rating on The Jammu & Kashmir Bank Ltd. suggests a cautious approach. The stock’s attractive valuation and solid quality metrics provide a foundation for potential value, but the flat financial trend and mildly bearish technical signals indicate that immediate upside may be limited. Investors currently holding the stock may consider maintaining their positions while monitoring upcoming quarterly results and market developments closely.
New investors might prefer to wait for clearer signs of financial improvement or technical strength before initiating fresh positions. The bank’s strong provisioning and long-term profit growth remain positive factors, but short-term earnings softness and price momentum warrant prudence.
Overall, the 'Hold' rating reflects a balanced view, recognising both the strengths and challenges facing The Jammu & Kashmir Bank Ltd. in the current market environment.
Summary of Key Metrics as of 25 December 2025
- Mojo Score: 50.0 (Hold)
- Provision Coverage Ratio: 76.11%
- Net Profit Annual Growth Rate: 66.50%
- Net Interest Income (Quarterly): ₹1,433.99 crore
- Profit After Tax (Quarterly): ₹494.11 crore (-8.1% vs previous 4Q average)
- Return on Assets (ROA): 1.2%
- Price to Book Value: 0.7
- PEG Ratio: 1.5
- Stock Returns: 1 Day: -0.75%, 1 Week: -1.29%, 1 Month: -4.48%, 3 Months: -4.81%, 6 Months: -6.94%, YTD: -1.57%, 1 Year: +1.15%
Investors should continue to monitor the bank’s quarterly performance and broader sector trends to reassess the stock’s outlook in the coming months.
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