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This is an entirely free service. No payments are to be made.Punjab & Sind Bank (PSB) declared its results for the first quarter of the financial year 2012-13 (1QFY13). The bank has reported 17% YoY growth in interest income and a 63% fall in net profits. Here is our analysis of the results.
Rs (m) | 1QFY12 | 1QFY13 | Change |
Interest income | 15,010 | 17,583 | 17.1% |
Interest expense | 11,502 | 13,894 | 20.8% |
Net Interest Income | 3,508 | 3,689 | 5.2% |
Other Income | 937 | 859 | -8.3% |
Other Expense | 2,772 | 2,776 | 0.1% |
Provisions and contingencies | 682 | 855 | 25.4% |
Profit before tax | 991 | 916 | -7.5% |
Tax | 350 | 676 | 93.1% |
Profit after tax/ (loss) | 641 | 240 | -62.5% |
Net profit margin (%) | 4.3% | 1.4% | |
No. of shares (m) | 234.2 | ||
Book value per share (Rs)* | 142.7 | ||
P/BV (x) | 0.4 |
(Rs m) | 1QFY12 | % of total | 1QFY13 | % of total | Change |
Advances | 431,700 | 475,820 | 10.2% | ||
Deposits | 597,970 | 643,860 | 7.7% | ||
Credit deposit ratio | 72.2% | 73.9% |
The bank however needs to dilute equity to strengthen its capital base over the next 1-2 years. Although its historical return on equity is comparable to that of the best managed banks, PSB is currently priced at a considerable discount to its PSU peers. However, higher provisioning and inability to control its cost of funds and asset quality are major concerns. Unfortunately the bank’s management has so far not shown inclination to throw light on the future prospects of the entity. In light of its lackluster performance and limited visibility in terms of profit sustenance, we need to review our estimates for the stock.
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