Central Bank of India Graham Discount Meets Altman Distress

Graham discount meets balance-sheet distress Central Bank of India ([CENTRALBK](/stock/CENTRALBK)) is showing up in two screens that rarely sit together. The Graham Number screen lists the stock at ₹31.40 against a ₹71.46 fair value. That puts the share at 43.9% of fair value, or a 56.1% discount if you subtract from 100. The Altman Z-Score screen has the same bank at 0.33, well below the 1.81 distress zone. A debt-to-equity ratio of 11.80 explains most of that Altman reading. The P/E of 6.23 is the value pitch. The balance sheet is the catch. This overlap matters because deep value screens stop at the multiple. They don't ask whether the equity base can absorb a bad loan cycle. Central Bank of India is a state-owned bank, so deposit outflows aren't the main risk. The risk is earning power against a large liability stack. The Altman model was built for industrial companies, not banks. A 0.33 score is less precise for a deposit-funded lender than for a manufacturer. But the reading is low enough to say that earnings are thin relative to the liability base. For context, a D/E of 11.80 means ₹11.80 of liabilities for every ₹1 of equity. That is high even by public sector bank standards. It also means a 1% shock to asset quality can erase a large part of book value before the P/E multiple matters. Sector comparison puts the valuation in context The PSU bank group has re-rated because credit costs fell and net interest margins held up. Against that backdrop, a 6.23 trailing P/E is not uncommon for the sector. [State Bank of India](/stock/SBIN) trades at a higher multiple because its deposit franchise is larger and its capital base is deeper. [Bank of Baroda](/stock/BANKBARODA) sits in the middle. Central Bank of India sits at the lower end of the pack. The ₹71.46 fair value implied by the Graham screen assumes that the bank's book value and earnings power stay intact. The ₹31.40 market price says investors aren't confident about that. A 43.9% price-to-fair-value ra...