The losses of Central Bank have sharply widened to Rs.2447 crore in the March quarter to just Rs.718 crore in the December quarter. This is on the back of higher provisioning for doubtful debts. The total income was up by 5% at Rs.6620 crore. In fact, for the full year the bank has reported losses of Rs.5641 crore, which is about 10% wider than last fiscal year. Gross NPAs came down from 21.5% to 19.3% but the level is still too uncomfortable. In the current fiscal year, the company has set aside Rs.4523 crore as provisions for bad loans, which is just slightly lower than the Rs.4832 crore provisions made in the previous year.

The stock of Central Bank is currently quoting at Rs.27 and you would be right in believing that downside risk may not be too high. But you cannot be sure as to how much pain is there in these kinds of stocks. The best thing to do would be sit out of such stocks and buy them when their bad assets bottom out and they start showing profits.