Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for The Jammu & Kashmir Bank Ltd. indicates a neutral stance on the stock, suggesting that investors should maintain their existing positions rather than aggressively buying or selling. This rating reflects a balanced assessment of the bank’s quality, valuation, financial trend, and technical outlook as of today. It implies that while the stock has certain attractive features, there are also factors that warrant caution, making it prudent for investors to monitor developments closely.
Quality Assessment: Solid Fundamentals with Room for Improvement
As of 05 January 2026, The Jammu & Kashmir Bank Ltd. holds a 'good' quality grade. The bank demonstrates strong provisioning practices, with a provision coverage ratio of 76.11%, which is a positive indicator of its risk management and asset quality. Additionally, the company has exhibited healthy long-term growth, with net profit increasing at an annual rate of 66.50%. This robust profit growth underscores the bank’s ability to expand its earnings base over time.
However, recent quarterly results show some softness. The net interest income (NII) for the latest quarter stood at ₹1,433.99 crore, the lowest in recent periods, while the profit after tax (PAT) declined by 8.1% to ₹494.11 crore compared to the previous four-quarter average. These flat results suggest that while the bank’s fundamentals remain sound, near-term earnings momentum has moderated.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Valuation: Attractive Pricing Amidst Market Volatility
The Jammu & Kashmir Bank Ltd. currently holds an 'attractive' valuation grade. The stock trades at a price-to-book (P/B) ratio of 0.7, indicating it is priced below its book value and at a discount relative to its peers’ historical averages. This valuation level may appeal to value-oriented investors seeking exposure to the private sector banking segment at a reasonable price.
Moreover, the bank’s return on assets (ROA) stands at 1.2%, which is a respectable figure in the banking industry, reflecting efficient utilisation of assets to generate profits. Over the past year, the stock has delivered a modest return of 3.67%, while profits have grown by 3.4%. The price-earnings-to-growth (PEG) ratio of 1.6 suggests that the stock’s price growth is somewhat aligned with its earnings growth, though not excessively undervalued.
Financial Trend: Flat but Stable Performance
The financial trend grade for the bank is currently 'flat', indicating that recent financial performance has neither significantly improved nor deteriorated. While the bank’s long-term profit growth is impressive, the latest quarterly results show a slight decline in profitability. This mixed trend suggests that investors should watch for signs of renewed earnings momentum or further softness in upcoming quarters.
Technical Outlook: Mildly Bearish Signals
From a technical perspective, the stock is graded as 'mildly bearish'. This reflects recent price movements and market sentiment that have not been strongly positive. The stock has shown some volatility, with a one-day gain of 1.85% and a one-week gain of 6.48%, but it has also experienced declines over the three- and six-month periods, with returns of -1.00% and -8.62% respectively. Year-to-date, the stock has gained 4.09%, indicating some recovery in early 2026.
These technical signals suggest that while the stock is not in a strong uptrend, it is also not deeply oversold, warranting a cautious approach for traders and investors alike.
Shareholding and Market Capitalisation
The Jammu & Kashmir Bank Ltd. is classified as a small-cap stock within the private sector banking space. Promoters remain the majority shareholders, which often provides stability in ownership and strategic direction. Investors should consider this factor alongside the bank’s financial and technical profile when making investment decisions.
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What This Rating Means for Investors
For investors, the 'Hold' rating on The Jammu & Kashmir Bank Ltd. suggests a balanced outlook. The bank’s strong provisioning and long-term profit growth provide a solid foundation, while its attractive valuation offers potential value. However, the flat recent financial trend and mildly bearish technical signals counsel caution.
Investors currently holding the stock may consider maintaining their positions, monitoring quarterly results and market developments closely. Prospective buyers might wait for clearer signs of earnings recovery or technical strength before initiating new positions. Conversely, those seeking to reduce exposure could do so selectively, given the stock’s valuation appeal and quality fundamentals.
Summary
In summary, The Jammu & Kashmir Bank Ltd. is rated 'Hold' by MarketsMOJO as of 02 December 2025, with the current analysis reflecting data as of 05 January 2026. The rating is supported by good quality fundamentals, attractive valuation, flat financial trends, and mildly bearish technicals. This comprehensive assessment provides investors with a nuanced view of the stock’s current standing and potential outlook.
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