Jio Financial Services slips 7% post December quarter results

The company reported 56 per cent drop in its consolidated profit after tax at Rs 294 crore for the December quarter (Q3), due to fall in income and rise in expenses.

Shares of Jio Financial Services (JFSL) slipped 7 per cent to Rs 248.05 on the BSE in Tuesday’s intra-day trade amid heavy volumes after the firm reported 56 per cent drop in its consolidated profit after tax (PAT) at Rs 294 crore for the December quarter (Q3), due to fall in income and rise in expenses. The non banking finance company had posted PAT of Rs 668 crore in the September quarter (Q2).

In the month of January, in 11 trading days, the stock price of Jio Financial had rallied 14 per cent till Monday.

The average trading volumes at the counter jumped over three-fold today. A combined 59.79 million equity shares representing nearly 1 per cent of total equity of Jio Financial changed hands on the NSE and BSE till 01:01 PM. The S&P BSE Sensex was down 0.17 per cent at 73,201.

JFSL’s total income fell by 31.9 per cent to Rs 414.33 crore from Rs 608 crore in Q2 of FY24, though interest income during the same period increased to Rs 269 crore. The total revenue from operations stood at Rs 413.6 crore.

In its investor presentation, the company said that its payments bank had launched a debit card during the quarter and was re-platformed to launch a digital savings bank account.

Further, the company said it was planning to launch leasing business and supply chain financing to focus more on secured lending on account of current market and regulatory developments.

The PAT of JFSL was down due to absence of dividend income on shares held in Reliance Industries (Q2FY24 dividend income at Rs 371 crore) and increase in opex on employee addition, capacity building and CSR expenses.

JFSL successfully completed 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 100 per cent leasing subsidiary under which it plans to provide equipment on lease to end customer. JFSL further leveraging its eco-system will launch Supply Chain Financing in Q4FY24. Loans against Shares/MF, home loans are in pipeline while the capability for unsecured and consumer durables product is built up, the Centrum Broking said in flat note.