Jammu & Kashmir Bank Q4 FY24 Results: Profit Slips 8.5% YoY, Asset Quality Sees Notable Improvement

Jammu & Kashmir Bank reported its financial results for the fourth quarter of FY24, with mixed signals from the profitability and asset quality front. While the net profit declined 8.5% year-on-year to ₹584.5 crore from ₹638.7 crore in Q4 FY23, the bank demonstrated strong operational improvement through higher interest income and significant asset quality gains.

Net Interest Income (NII) grew 13.3% year-on-year, reaching ₹1,480 crore compared to ₹1,306.1 crore in the same period last year. The rise in NII indicates improved lending traction and better yield on advances. Operationally, the bank continues to maintain a high operating profit margin of 68.0% and a net profit margin of 16.6%, showcasing healthy efficiency ratios despite the YoY decline in profit.

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On the asset quality front, Jammu & Kashmir Bank delivered a strong performance. Gross NPA fell sharply to 3.37%, down from 4.08% in the previous quarter. Net NPA also improved to 0.79%, compared to 0.94% QoQ. This continued reduction in bad loans reflects improved recoveries and credit control mechanisms, putting the bank in a stronger position moving into FY25.

Despite trading at just ₹94.4 per share, the stock offers compelling valuation comfort with a price-to-earnings (P/E) ratio of 5.01 and a price-to-book value (P/BV) of only 0.77, far below the industry average of 1.21. Return on equity (ROE) stands at a healthy 15.8%, and return on assets (ROA) at 1.29%, while the Altman Z Score of 0.48 and negative free cash flows do signal caution for risk-sensitive investors.

Over the past three years, the bank has delivered a compound annual profit growth of 61% and a sales CAGR of 16%. However, stock performance has remained volatile, with a 3-year CAGR of 47% but a sharp -29% return in the past year alone. The company has generated consistent earnings but still faces challenges with weak cash flow, reflected in a 3-year cumulative free cash outflow of ₹2,607 crore.

The promoter holding remains stable at 59.4%, while the FII stake has increased to 7.64% as of March 2025, up from 6.99% a quarter ago. DII participation stands at 6.69%, and public shareholding is around 26.26%, maintaining a healthy retail presence.

Based on limited coverage, the stock has a single analyst rating, and that analyst has assigned a full ‘Buy’, showing positive expectations for the bank’s trajectory in FY25.

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With improving asset quality, stable margins, and attractive valuations, Jammu & Kashmir Bank could be an under-the-radar opportunity in the PSU banking space, though cautious investors may want to monitor its cash flow position and stock volatility.

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