JM Financial - seems to be getting the attention now.
1 Like
10 Likes
JM Concall
- Digant Haria question at the very beginning
- JM financials recurring revenue monologue was amazing.
- ARC recoveries good too.
Very +ve concall and heartening to see the IPO market updates : pipeline of 45 IPO transactions aggregating to 1 lakh crore
- closed 10 capital market transactions during the quarter, demonstrating a “disproportionate market share”
Bajaj investment might be helpful in long run with - firstly to establish a valuation for the home loan business
they can sell portfolios to Bajaj housing just like the past from its affordable housing fin.
20 Likes
Any view on these regulatory issues for which JM Financial was penalized by RBI and SEBI. Looks like there have been questionable practices. Below cases are not very old.
1 Like
I think this issue solve,last qtr and fy year result and comentry of promotors achived nicely .
1 Like
JM Financial Q2 FY26 Results
The Positive Highlights
-
Investment Banking Remains Strong: The Corporate Advisory and Capital Markets division continued to perform well, with its PAT growing 41% YOY.
-
Large Future Pipeline: A key positive for the company is its filed IPO pipeline, which has grown to ₹1,20,000 crores. On the earnings call, management stated they typically earn about 0.8% to 1% of the issue size on these deals.
-
Fee Income at Record High: The company’s fee and commission income reached its highest ever quarterly level at ₹341 crores, a 20% increase year-over-year. This aligns with the company’s “asset-light” strategy.
-
Affordable Home Loans Growing: The affordable housing segment’s AUM grew 28% YoY, crossing the ₹3,000 crore mark. The profit for this division doubled to ₹13 crores. This follows a small stake sale in Q1 to Bajaj Allianz, which set a valuation for the business at approximately ₹3,100 crores.
-
Shareholder Payouts: The company declared an interim dividend of ₹1.5 per share, following through on its earlier promise to increase payouts as the business requires less capital.
The Challenges and Investment Costs
- “Growth Engine” is a Short-Term Cost: The main challenge is that the segments management is investing in for future growth are currently a drag on profits.
- Heavy Spending: The company is in an “investment phase,” hiring aggressively. The number of Wealth Management Relationship Managers (RMs) doubled year-over-year (from 101 to 204), and the total sales staff grew 43% (to 1,015).
- Resulting Losses: These new costs are impacting the bottom line immediately.
- Wealth Management: Profit (PBT) declined to ₹37 crores (from ₹45 cr last year). Management noted this was partly due to an industry-wide slowdown in broking volumes.
- Asset Management: The division posted a loss of ₹10 crores.
- Mutual Fund SIPs: The SIP book for the mutual fund business fell from its peak to ₹115 cr/month. Management attributed this to “volatility” from “do-it-yourself” digital clients.
Strategy: Where the Money is Going
On the call, management explained the current spending is part of a clear strategy to grow its Asset Management business by launching new Alternative Investment Funds (AIFs).
- A Pre-IPO fund has been filed and is awaiting regulatory approval.
- A Real Estate Credit fund has been approved and is now in “full fundraising mode.”
- A new Private Equity (PE) fund is also planned.
Balance Sheet Update
The “clean-up” of the old, risky loan book is progressing as planned. The “Non-Core” book has shrunk by 59% YoY, and the Asset Reconstruction (ARC) business has recovered ₹1,273 crores in cash over the last 12 months.
However since the concall the share price has continued to decline. Am I overlooking something?
Disc - Invested
8 Likes
Results are good.. wealth management segment is cyclical in nature. Due to current sideways market, it will feel the pressure but in next bull run, it should outperform.
Invested with large allocation
2 Likes
Other Wealth management companies have reported good numbers in Wealth mgmt
For e.g: Nuvama wealth and private wealth grew by 25%+ and 35%+
Motilal private wealth also grew by 30%+
But market is punishing JM financial because their welth management did not perform well this quarter and it might be due to still their major revenue might be coming from Broking transaction based income
2 Likes
It is because their wealth management is not doing well compared to peers
Look at Nuvama’s wealth management and Private wealth management
JM’s wealth management is similar to Motilal’s wealth management where majority of revenues still come from Transaction based broking income. That is why motilal gets low PE in wealth management sector. Motilal has made their revenue quality much better in last 1 year by reducing broking income share
Also their RM addition and branch addition is not going very aggresive as they told in Q1
Just check RM addition, AUM addition and Wealth mgmt branch addition QoQ (Q2FY26 vs Q1FY26)
6 Likes