Stock watch: J M Financial

JM Financial Ltd may be a good scrip to keep an eye on. In Monday's trading session, the scrip closed at Rs 300.90, 1.10 per cent down compared with its previous close of Rs 304.25, touching an intra -day high of Rs 310.

JM Financial Ltd ( JMFL) is one of the leading securities firm in India. Its association with Morgan Stanley Dean Witter also provides it with a strong brand recognition.

The primary driver of the company's earnings is its joint venture with Morgan Stanley Securities (JMMSSL), which is ranked among the top five institutional stock broking firms in India.

Analysts expect the company's top line to grow at a compound annual growth rate (CAGR) of 66.6 per cent and profit after tax (PAT) to grow at CAGR of 53.5 per cent during FY2005-07E.

Considering the scrip to be a major beneficiary of the escalating activities in the country's stock market, analysts expect the stock to perform well in the future.

According to them, at the current price of Rs 300, the stock is discounting its FY2007E earnings per share (EPS) by nearly 16 times. JM Financial had recently approved a Rs 2 crore investment in equity shares of its newly incorporated subsidiary JM Financial Commtrade.