The shares of this private-sector bank fell around 5 percent to an intraday low after the company received a whopping Rs 16,000 crores GST notice.
Price Movement
With a market capitalization of Rs 11,154.98 crore, the shares of Jammu & Kashmir Bank were trading at Rs 101.30 per share, decreasing around 2 percent as compared to the previous closing price of Rs 103.31 apiece.
Reason for rise
The shares of the company have seen bearish movement after Jammu & Kashmir Bank received GST notice from Joint Commissioner, Central GST Commissionerate, Jammu for GST liability of Rs. 8,130.6 crore with interest as applicable and penalty of Rs. 8,130.6 crore. This GST notice is 1.45 times greater than the market cap.
Regional Economic Performance
Jammu & Kashmir’s GDP is projected to reach Rs 2,63,399 crores in FY ’25, growing 7.5% YoY. Key sectors driving growth include services, industries, horticulture, and tourism, which saw a record 1.08 crore visitors in early 2024, with 15.13% annual growth over three years.
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Financial performance
The company’s Q2 net profit rose 44.6% YoY to Rs 551 crore, with operating profit exceeding Rs 750 crore. Deposits grew 9% YoY, reversing previous degrowth. CASA ratio stands at 48.60%. Advances grew 9.5% YoY, with housing loans up 15.6%.
Asset Quality and NPA Management
The company maintains strong asset quality with a 0.91% annualized gross slippage ratio. As of September 30, 2024, Gross NPA stands at 3.95% and Net NPA at 0.85%, with a provision coverage ratio above 90%. Recovery slowed due to elections, but restructured collections remain strong.
Company Profile
Jammu and Kashmir Bank Limited (the Bank) is engaged in banking and financial services. Its segments include Retail, Corporate, and Treasury. The Bank offers a range of products and services, such as loans, personal accounts, term deposits, insurance, cards, business accounts, agriculture loans, and others.
Written by Abhishek Singh
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