Jammu & Kashmir Bank: Leadership in J&K Provides Cheap Deposit Base

Rajeev Agrawal of DoorDarshi Value Advisors presented his investment thesis on Jammu & Kashmir Bank (NSE: J&KBANK) at Asian Investing Summit 2018.

Thesis summary:

Jammu & Kashmir Bank has 60+% market share in the geography in which it operates, Jammu & Kashmir (J&K) state in India. The bank lost its way over many years by venturing into areas in which it had no competitive advantage. The bank appointed a new CEO one-and-a-half years ago. The CEO has cleaned up the books and re-focused operations on areas in which the bank possesses competitive advantage. This, along with improvement in economy, resolution of stressed assets, and government support, positions the bank well going forward. As provisions subside and earnings show through in the coming years, the shares may be revalued by investors. According to Rajeev’s fair value analysis, which is based on 9% asset growth and 0.9% ROA assumptions, the bank may trade at more than twice the recent stock price (after dilution of 25%) by the end of fiscal year 2021.

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About the instructor:

Rajeev Agrawal is the Founder and Managing Partner at DoorDarshi Value Advisors. Rajeev has been investing in the US and Indian equity markets for 15+ years. Rajeev follows Value Investing principles and finds that Indian equity market provides wonderful opportunities for his style of investing. Prior to starting DoorDarshi, Rajeev was a Technology executive focusing on the Financial Industry. He retired from IHS Markit as MD and CTO. Prior to that he has worked in US in various senior positions at Goldman Sachs, Bank of America, JP Morgan and Dresdner Bank. Rajeev completed his B.Tech from IIT Bombay and MBA from IIM Calcutta. He is also a CFA charterholder.