Jio Financial Services share price tanks over 6% after Q3 results
- Jio Financial Services’ net interest income (NII) jumped 44% QoQ to ₹269.08 crore in Q3FY24 from ₹186.06 crore during the quarter ending September 2023.
Jio Financial Services share price declined over 6% in early trade on Tuesday after the company announced its Q3 results. Jio Finance share price fell as much as 6.25% to ₹250.10 apiece on the BSE.
The demerged entity of Reliance Industries, Jio Financial Services Ltd (JFSL) recorded a 56% quarter-on-quarter (QoQ) decline in their net profit for the third quarter of FY24 at ₹293.82 crore from ₹668.18 crore in the September quarter.
The company’s revenue in Q3FY24 slumped 32% to ₹413.61 crore from ₹608.04 crore, QoQ.
Jio Financial Services’ net interest income (NII) jumped 44% QoQ to ₹269.08 crore in Q3FY24 from ₹186.06 crore during the quarter ending September 2023.
This was the NBFC Jio Financial Services' second financial results after the stock exchange listing in August 2023 post its demerger from billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL).
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The sequential fall in JFS net profit was due to absence of dividend income on shares held in Reliance Industries Ltd. and increase in opex on employee addition, capacity building and CSR expenses, analysts said.
“JFSL successfully completed a sandbox for Consumer Durable Loans and Personal Loans, however, post RBI tightening on consumer unsecured lending the company has increased its focus on secured lending including leasing as a product. The company plans to start a 100% leasing subsidiary under which it plans to provide equipment on lease to end customer,” Centrum Broking said in a report.
JFSL further leveraging its eco-system will launch Supply Chain Financing in 4QFY24. Loans against Shares/MF, home loans are in pipeline while the capability for unsecured and consumer durables products is built up.
“As on 2QFY24, JFSL was trading at NAV/Share (cons) of ₹182. If we add total comprehensive income of ₹92.9 billion for 3QFY24, we derive NAV of ₹197 per share,” said the brokerage firm.
Meanwhile, global brokerage firm Jefferies noted JFS has expanded its client base in insurance broking to 27 and is ramping up its payments bank and payments platforms.
Jefferies sees Jio Financial Services taking a balanced approach to growth.
Despite initial concern about increased competition from JFSL, Jefferies sees limited risk for Bajaj Finance and banks.
At 9:45 am, Jio Financial Services shares were trading 3.69% lower at ₹256.95 apiece on the BSE.
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