J&K Bank at new high, stock surges 26% in one month

Analyst believes that the bank?s return ratios are likely to expand significantly by going forward.

Jammu and Kashmir (J&K) Bank is trading higher by 4% to Rs 1,125, also its lifetime high, in otherwise weak market on the Bombay Stock Exchange. The stock opened at Rs 1,085 and has seen a combined 70,606 shares changing hands on the counter so far.

The private sector bank has outperformed the market by appreciating 26% in past one month as compared to 12% rise in banking sector index Bankex during the same period.

"Over the past few years, the bank based in J&K has aggressively expanded its advances book outside J&K region, reporting a 26% growth in advances over FY11-12, considerably ahead of the industry average of 17%," says analyst at Edelweiss Securities.

Analyst believes that the bank’s return ratios are likely to expand significantly given the management’s focus on loan book growth, reducing NPA (non-performing assets), improving fee income and achieving operational efficiency.