X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Of Cheap Valuation of PSU Banks and Key Stocks in Action Today
Mon, 21 May Pre-Open | Parth Parekh, TM Team

NSE PSU Bank Index surged 30% on 25th October 2017-the date when bank recapitalization of Rs 2.1 trillion was announced. God bless the investors who bought the public-sector banks on this date. Fast forward to 18th May and investors would have lost massive net worth in these stocks.

Loss in Market Capitalization of PSU Banks from 26th October 2017 to 18th May 2018
BankPrice as on 26th October 2017Price as on 18th May 2018Loss in Market Cap (in %)Current Price/ Book Value (New)10 Yr Average Price/ Book Value
Punjab National Bank21375-65%0.51.1
Union Bank of India18683-55%0.40.7
Allahabad Bank8438-55%0.40.7
Andhra Bank7034-51%0.30.8
Syndicate Bank8243-47%0.40.8
Bank of India19393-52%0.50.9
Bank of Baroda185127-32%0.81.1
SBI Bank321239-25%1.11.3
Source: ACE Equity

The healthy correction has led to these banks trading at attractive valuations. All the banks as mentioned in this table are trading below their ten-year median price/book value.

--- Advertisement ---
Something like this may never happen again!

Imagine an opportunity where multiple high-quality small caps become affordable at the same time.

Yes! An unexpected and sudden ruling by the market regulatory body is likely to open up an unexpected chance to potentially profit BIG from solid small caps for regular investors.

But this opportunity could last for a very short time only. So hurry!

Click here for full details on this time-sensitive opportunity
------------------------------

Now, there is a term in investing called Value Traps. Value traps are stocks that are trading at very cheap valuations. These stocks can trade cheap forever and never really recover in terms of stock price performance. There is a reason for this. And the reason is related to structural problems with the company.

The structural problem with public sector banks is the credit appraisal policy. In the greed of balance sheet growth and pressure from government, these banks have lent to stressed sectors such as power and iron & steel. The result- Gross Non-Performing Assets (GNPA's) of public sector bank have shot up to 11.03% in FY17 as compared to 4.97% in FY15.

Unless such structural problems are resolved it is highly likely that some of these banks act as a value trap and continue to deliver miserable stock returns in the long run.

Top Stocks in Action Today

The stock of Atul Auto, Advances Enzymes, Jaiprakash Associates, Sanghi Industries, Rushi Decor are expected to be in the news today as they declare their results for the quarter ended March 2018.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Of Cheap Valuation of PSU Banks and Key Stocks in Action Today". Click here!

  

Stock Market Updates

Top 5 Mid-Cap Gainers Today; HAVELLS IND Leads the Pack (Today's Market)

Jan 22, 2019 04:28 PM

Here's a list of 5 stocks that gained the most in the BSE Mid-Cap Index today. It also includes information on BSE Mid-Cap index and the broader benchmark indices.

MINDTREE LTD Surges by 5%; BSE IT Index Up 0.1% (Today's Market)

Jan 22, 2019 03:34 PM

MINDTREE LTD share price has surged by 5% and its current market price is Rs 928. The BSE IT is up by 0.1%. The top gainers in the BSE IT Index is MINDTREE LTD (up 5.0%). The top losers are ECLERX SERVICES and TCS (down 0.4%).

HEG LTD Plunges by 5%; BSE CAPITAL GOODS Index Down 0.5% (Today's Market)

Jan 22, 2019 03:34 PM

HEG LTD share price has plunged by 5% and its current market price is Rs 3,379. The BSE CAPITAL GOODS is down by 0.5%. The top gainers in the BSE CAPITAL GOODS Index are HAVELLS IND (up 5.0%) and THERMAX LTD (up 3.6%). The top losers is HEG LTD (down 5.1%).

WIPRO at 52 Week High; BSE 500 Index Down 0.2 % (Today's Market)

Jan 22, 2019 03:34 PM

WIPRO share price has hit a 52-week high. It is presently trading at Rs 350. BSE 500 Index is down by 0.2% at 14,524. Within the BSE 500, WIPRO (up 3.4%) and PHILLIPS CARBON BLACK (up 5.9%) are among the top gainers, while top losers are ITI LTD and DEEPAK FERTILISERS.

INFO EDGE Surges by 5%; BSE IT Index Down 0.0% (Today's Market)

Jan 22, 2019 03:20 PM

INFO EDGE share price has surged by 5% and its current market price is Rs 1,639. The BSE IT is down by 0.0%. The top gainers in the BSE IT Index is INFO EDGE (up 5.3%). The top losers are TCS (down 0.3%) and ECLERX SERVICES (down 0.5%).

Sensex Trades 250 Points Lower; Vedanta & Tata Steel Top Losers (Today's Market)

Jan 22, 2019 12:30 pm

The BSE Sensex is trading down by 261 points, while the NSE Nifty is trading down by 83 points.

View More Indian Share Market News

Most Popular

Our First Bluechip Stock Recommendation in Smart Money Secrets(The 5 Minute Wrapup)

Jan 9, 2019

For the first time, we have recommended a bluechip stock in Smart Money Secrets.

3 Stocks in Super Investor Sumeet Nagar's Portfolio That You Can Buy Right Now(The 5 Minute Wrapup)

Jan 11, 2019

The reasons that make these six stocks in Sumeet Nagar's portfolio so compelling

This Trend Will Produce a Once in a Lifetime Opportunity to Buy Stocks(The 5 Minute Wrapup)

Jan 15, 2019

Unlike his habit of pouring out stock wisdom in his annual letters to shareholders, Buffett spoke of this trend only once every few decades.

My First Stock Trading Recommendation For 2019(Profit Hunter)

Jan 10, 2019

My first trading recommendation for 2019 is a bluechip auto stock. Find out everything about it right away.

My Next Small Cap Recommendation Is Practically a 'No Brainer'(Profit Hunter)

Jan 14, 2019

With a strong debt free balance sheet in its favour, attractive dividends and trading at almost lifetime lows, this investing idea is almost a no brainer.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Jan 22, 2019 (Close)

MARKET STATS