by Ankita Lodh on 16 July 2024, 5 minutes min read
As the company’s Q1 FY25 results are here, all eyes are on Jio Financial Services Ltd. (JFSL). From Reliance Strategic Investments to its current status as a multifaceted financial services provider, JFSL has made significant strides over the years.
Let’s explore how JFSL has performed in the first quarter of FY 2025 and what it means for investors in India.
Jio Financial Services was originally commenced as Reliance Strategic Investments Pvt. Ltd. in 1999. As NBFC-ND-SI registered with the Reserve Bank of India, JSFL is a holding company and operates with its customer-centric subsidiaries, including Jio Finance Ltd., Jio Insurance Broking Ltd., Jio Payment Solutions, and Jio Payments Bank Ltd.
Jio Financial Services focuses on diverse requirements such as lending & leasing, payments, and investments. JSFL got listed and became a public company in August 2023. In September 2023, however, JSFL was delisted from BSE and FTSE. The listing took place after its demerger from Reliance Industries and receiving ₹15,500 crore as liquid investments from the scheme.
JFSL has also tied up with BlackRock in a 50:50 joint venture in 2024, solidifying its global footprint in the industry.
Some of the competitors of Jio Financial Services include Bajaj Finance and Bajaj Finserv, with a market capitalisation of ₹435658.89 and ₹255968.88, respectively.
Recently, Jio Financial Services also got the green light from the RBI to convert to a Core Investment Company from a Non-Banking Financial Company. Jio Financial Services Q1 FY25 results have been expected to be promising because of this reason.
Experts have been anticipating Jio Financial Services to deliver promising results in Q1 FY25. This anticipation is backed by the company’s impressive growth in operating income. Jio Financial Services has initiated multiple digital products and proposed to launch services for getting loans against mutual funds and shares.
After reaching ₹310.63 crore in the previous three months of the current financial year, JFSL reported a sequential increase in net profit to ₹312.63 crore in the June quarter.
On July 15, the corporation said that its total income for the quarter ended June 30 was ₹417.82 crore, up from ₹414.13 crore the previous year and ₹418.18 crore for the quarter ended March 31.
The business stated in its investor presentation that Jio Insurance Broking Ltd. will boost growth in the institutional channel, increase its embedded insurance portfolio, and provide new products on the digital channel. Apart from that, the company has also beta-launched the Jio Finance App.
According to the presentation, Jio Payments Bank would also prioritise cross-selling goods, channel growth, and promoting transactions through these channels. The company stated in a presentation that it will investigate lending against securities and real estate.
Source: JFSL Investor Presentation
In FY24, Jio Financial Services recorded ₹1,605 crores of consolidated PAT in the financial year 2024, with a Total Income of ₹1,855 crore. In the previous quarter, JFSL reported a 6% growth in Q-o-Q consolidated net profit.
Below, we can see a breakdown of the consolidated results in the past quarters of FY24 and easily compare them to Q1 FY25.
Results (₹ crore) | June 23 | Sep 2023 | Dec 2023 | March 2024 | June 2024 |
Operating Profit | 376 | 542 | 320 | 320 | 344 |
Profit before tax | 427 | 754 | 381 | 393 | 400 |
Net Profit | 332 | 668 | 294 | 311 | 313 |
As of July 15, 2024, the Jio Financial Services price today has moved in a positive direction. Jio Financial Services’ share price closed at ₹355.05 on Monday. Let’s look at some of the current financial metrics of JFSL. The Jio Financial Services share price (NSE) is up 48.43% YTD and 62.35% in the last 5 years.
Market cap | ₹2,24,239 crore |
Stock P/E | 140 |
ROCE | 1.55% |
ROE | 1.27% |
Industry PE | 23.9 |
At present, the shareholding pattern of Jio Financial Services is as follows (as of March 2024):
Promoters | 47.12% |
FIIs | 19.45% |
DIIs | 12.50% |
Government | 0.14% |
Public | 20.77% |
Source: Screener
Now that the Q1 results are out for FY25, here’s an unbiased take on Jio Financial Services’ investment potential.
The overall strategy of the promoters’ group significantly impacts the business. Jio Financial Services boasts a group of promoters with an impressive track record of leading successful operations in different sectors, like petrochemicals and telecom. The promoter group has already shown their capability by scaling diverse customer-centric companies.
The dedication and commitment of the promoters have led their stake in JFSL to 47.12%, up from 45.8% as of July 2024.
JFSL reported a consolidated PAT of ₹313 crore in the Q1 FY25 results. Jio Financial Services is expected to offer an edge through access to capital markets. The company has also started lending services that are anticipated to go smoothly forward. As of March 31, 2024, the company has strong liquid assets worth ₹22,000 crore.
The company has ample expertise in terms of management for running and scaling operations. The years of experience of the board of directors have also aided JFSL management in scale segments like retail financing and the overall business. According to CRISIL, along with JFSL’s strong financials after the Q1 results, these pointers can be an addition to JFS’s potential to scale.
CARE Ratings has assigned JFSL to CARE AAA with stable ratings for the ₹3000 crore non-convertible debentures of Jio Finance.
Although JFS’s subsidiaries are involved in financial services, including retail lending, payment solutions, and more, the business is in the early stages of its operations. The underwriting and asset quality are things that are yet to be evaluated.
It is expected that the core operating earnings might stay modest in the short term and scale up eventually. However, investors need to monitor profitability and asset quality to assess the business’s scalability.
Source: CRISIL
Jio Financial Services’ Q1 FY25 results paint a picture of a company on the rise, with steady growth in net profit and total income. The company’s diverse portfolio of services, strong liquidity position, and backing from experienced promoters provide a solid foundation for future growth.
However, as a relatively new entrant in the financial services sector, JFSL might face challenges. For that, investors need to keep a lookout before investing in their daily investment app.
As an investor, you should approach JFSL with a balanced perspective. Make sure you consider both its potential for growth and the inherent risks of a company in its early operational stages.
Dhanush by Ashika Stock Broking Ltd. is one of the top trading apps in India, offering a diverse range of products and insights to both beginner and seasoned investors. From data-driven research, competitively priced products, and the Ashika Group’s 30 years of expertise, Dhanush has a lot to offer for every investor’s needs.
To read similar blogs on the Indian stock market, click here.
Open Free Demat Account!
In just a few minutes, Simply provide some basic personal details, to get started.