JM Financial (523405) Q4 18/19 earnings summary

Executive summary

• FY19 performance reflected diversified operations and conservative underwriting amid NBFC liquidity stress; consolidated gross income rose while net profit declined.

• Business segments were reclassified under Ind AS into IWS, Mortgage Lending, Distressed Credit and Asset Management.

Financial highlights

• Consolidated gross income was ₹3,578.65 crore, up 15.57% YoY; profit after tax was ₹572.18 crore, down 4.77% YoY.

• Consolidated PBT increased to ₹1,282.79 crore from ₹1,164.84 crore; finance costs rose to ₹1,446.21 crore from ₹1,138.99 crore.

• Interest income rose to ₹2,364.94 crore; fees and commission income fell to ₹576.83 crore from ₹698.58 crore, while brokerage income fell to ₹190.21 crore from ₹218.83 crore.

• Net gain on derecognition of fair-value financial assets was ₹205.09 crore versus ₹26.08 crore; fair-value losses rose to ₹79.16 crore from ₹63.66 crore.

Outlook and guidance

• Investment banking expected opportunities from a conducive business environment and corporate fundraising; equity capital markets were expected to regain momentum in FY20.

• Mortgage lending planned selective growth with credit-quality discipline; housing finance demand was expected to benefit from affordable-housing measures and lower repo rates.

• Distressed Credit growth expected to remain affected by constrained long-term funding; no fresh acquisitions were envisaged in the coming quarter.

• Mutual fund operations focused on profitable growth and identified credit-oriented alternative funds as a potential growth area.