The Price-to-Book Value (P/BV) ratio is a key indicator used to evaluate the market valuation of a company relative to its book value. A P/BV ratio of less than 1.5 suggests that a company’s stock is trading at a price less than 1.5 times its book value, often indicating undervaluation or potential market pessimism.
In the case of PSU (Public Sector Undertaking) banks, few stocks are currently trading with a P/BV ratio of less than 1.5, suggesting that the market is undervaluing these banks compared to their tangible assets. This may present an attractive investment opportunity for long-term investors, as these banks often offer strong fundamentals and stability despite market volatility.
The 4 PSU banks trading at P/BV less than 1.5 times are:
Canara Bank
Price: ₹ 97
Book Value: ₹ 102
Canara Bank, established in 1906, is one of India’s largest public sector banks. It provides a wide range of banking products and services, including retail banking, corporate banking, wealth management, and treasury operations. Canara Bank has a strong presence in India with a network of over 10,000 branches and offers digital banking services to cater to modern customers. The bank is known for its focus on financial inclusion and has made significant strides in supporting MSMEs and government initiatives. It is also expanding its global footprint with branches in several countries, aiming to enhance international banking services.
Bank of Baroda
Price: ₹ 231
Book Value: ₹ 231
Bank of Baroda (BoB), founded in 1908, is one of India’s largest public sector banks. The bank provides a wide range of financial products, including retail, corporate, and investment banking, along with services in foreign exchange and trade finance. BoB operates through a vast network of branches across India and in several international markets, serving millions of customers. The bank has been focusing on digital banking services to enhance customer experience and improve efficiency. With a robust financial position, Bank of Baroda continues to play a pivotal role in supporting the growth of both domestic and international businesses.
Punjab National Bank (PNB)
Price: ₹ 103
Book Value: ₹ 100
Punjab National Bank (PNB), established in 1894, is a leading public sector bank in India. It offers a diverse range of banking services, including savings and current accounts, loans, mortgages, and wealth management. PNB operates a vast network of branches across India and has international operations, providing services like trade finance and foreign exchange. The bank has a strong focus on financial inclusion, aiming to reach underserved sections of the population. PNB is also embracing digital banking innovations to enhance accessibility and efficiency, catering to both individual and business clients with its comprehensive banking solutions.
Union Bank of India
Price: ₹ 112
Book Value: ₹ 128
Union Bank of India, founded in 1919, is one of the major public sector banks in India. It offers an array of banking services, such as retail banking, corporate banking, and agricultural finance, along with loans, deposits, and investment products. Union Bank has a strong presence across India with a growing network of branches and ATMs. The bank is also focusing on digital banking to provide a seamless customer experience and improve operational efficiency. Through its extensive outreach, Union Bank plays a key role in promoting financial inclusion, supporting small businesses, and contributing to the nation’s economic growth.
Written By: Dipangshu Kundu
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