JM Financial (523405) Q2 24/25 earnings summary

Executive summary

• RBI lifted restrictions on loan-against-shares and debentures, enabling renewed growth in this segment.

• Strategic pivot underway from on-balance sheet wholesale lending to off-balance sheet, syndication-driven models, focusing on high ROE businesses and consolidating private credit expertise.

• Significant investments in capital markets, corporate advisory, wealth, asset management, and affordable home loans, with strong liquidity supporting the transition.

• Group continues to expand digital and physical infrastructure, including new digital platforms and branch/franchisee growth.

• Unaudited consolidated and standalone financial results for the quarter and half year ended September 30, 2024, were reviewed and approved by the Board and auditors, with unmodified opinions issued.

Financial highlights

• Q2 FY25 consolidated revenue: ₹1,211.21 crore, up 10.7% QoQ; PAT after non-controlling interest: ₹232 crore, up 19% YoY and 36% QoQ.

• H1 FY25 consolidated revenue: ₹2,305.08 crore; PAT after non-controlling interest: ₹403 crore, up 12% YoY.

• Gross NPA at ₹835 crore (Q2 FY25), up from ₹813 crore in Q1; provision coverage ratio increased to 77%.

• Net loss on fair value changes of ₹101 crore due to delayed resolution of security receipts.

• One-time deferred tax credit due to tax law changes resulted in lower effective tax rates for the quarter.

Outlook and guidance

• Continued focus on growing affordable home loans, bespoke lending, and margin trade finance (MTF) with targeted AUM and book sizes.

• Expectation to reach ₹3,000 crore AUM in affordable home loans by March 2025; breakeven in asset management targeted by FY27.

• Dividend payout expected to increase due to low incremental capital requirements and robust profits.

• No inorganic expansion planned for the next 6–9 months; major group restructuring transactions await RBI approval.