I am holding substantial qty since 2018. Apparently a large number of retail shareholders who used to be very active on this thread seem to have left. This is sad. In my opinion, this bank has definitely crossed the turnaround point in Q1 and is now on way to its compounder story. This was repeatedly promised by the management only to be tripped first by Covid and then by microfinance loans. Let us keep our fingers crossed for next few quarters. If the bank moves along at the current pace of 20% asset growth, price should cross into 3 figures by April. Bank has structurally transformed as planned. Credit costs have stabilised and further scaling should continuously improve margins. Retail ownership of shares is reducing and shifting into the stronger hands of FIIs and DIIs. They seem to be holding in excess of 60% and GOI another 7%.
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In same boat, Highest holding of my portfolio and significant value, though the holding period is 2 years only but with complete conviction.
In fact i expect, if everything goes as expected, stock may touch 200 by march 2029.
Here is the simplified rational, bank will mostly post 1% ROA this FY, 4k cr profit. Next 2 year C/I goes down while asset quality staying put and 20% asset growth and back post 1.5% + ROA means a PAT of 9-10K Cr in fY29. Estimated BVPS - 75-80Rs
Assumption 15% equity dilution, BVPS 70rs
Now a strong deposit franchise, with 20% impeccable asset growth record, prestine asset quality and 1.5% + ROA (there could be + surprise also here if C/I does better, with high CASA and +ve MF cycle)
Can this asset get 22-23 PE and 2.7-2.8 P/B, I think Yes
PS: Invested and Biased
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