JM Financial (523405) Q1 24/25 earnings summary

Executive summary

• Strategic pivot from on-balance sheet wholesale lending to off-balance sheet syndication, consolidating private credit expertise under a single platform and focusing on high ROE businesses across capital markets, wealth and asset management, private credit syndication, and affordable home loans.

• Completed significant internal restructuring, including increased control and profit share in JM Financial Credit Solutions and divestment in Asset Reconstruction, with Board approval for major intra-group transactions.

• Achieved key milestones: wealth management AUM crossed INR 1 lakh crore; mutual fund AUM surpassed INR 10,000 crore, with INR 7,500 crore in equity; mutual fund AUM tripled YoY.

• Allotment of 146,491 equity shares to employees under stock options, increasing paid-up equity capital to Rs. 95.57 crore.

• Unaudited consolidated and standalone financial results for Q1 FY25 reviewed and approved by the Board, with unmodified auditor reports.

Financial highlights

• Q1 FY25 consolidated revenue at INR 1,094 crore (₹1,093.87 crore), up 1.2% YoY; net profit after tax and share in profit of associate at INR 186.98 crore, up from INR 176.56 crore YoY.

• Profit after tax (post non-controlling interest) rose 3% YoY to INR 171 crore.

• Pre-provision operating profit fell 15.6% YoY to ₹318 crore; PBT up 6.4% YoY to ₹245 crore.

• Loan book at ₹11,933 crore, down from ₹15,891 crore YoY; retail mortgage loan book grew 61% YoY to INR 3,267 crore.

• Segment revenue: Investment Bank ₹395.14 crore, Mortgage Lending ₹361.15 crore, Alternative & Distressed Credit ₹65.50 crore, Platform AWS ₹283.28 crore.

Outlook and guidance

• Continued focus on syndication model in wholesale credit, leveraging high liquidity in NBFCs and expecting significant cash generation as loan book runs down.

• Investments in digital broking, asset management, and capital markets to continue for two years, after which these businesses are expected to turn cash flow positive.

• Home loans targeted to grow at 35%, corporate advisory and capital markets in high teens, and wealth management at 25-30%.

• Proposed acquisition of a 48.96% stake in JM Financial Credit Solutions and sale of a 71.79% stake in JM Financial Asset Reconstruction Company, expected to complete within six months, with a net cash outflow of Rs. 426 crore.

• Cost-to-income ratio in wealth and asset management expected to stabilize by FY26-FY27 as investments mature.