I would not beyond a P/B of 2.5 on best case for these firms. Yes NPA is improving. But concern is that cycle repeats and current crop of loans from FY21-24 turn sour in FY27. There are expanding beyond core Power loans and funding other areas where they have no experience.
P/B of 2.0 – 2.5 should be fairly priced. Stock can indeed give decent 8-9% returns based growth and additional dividents which is currently 3%.
However if you bought at 150-200 a couple of years ago you can enjoy 10% dividend and ‘10% earnings growth. Easy Pickings and never sell.
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