JM Financial

Here are some key takeaways from the transcript of JM Financial’s earnings conference call for Q2 and H1 FY ’24:

• Record revenue: JM Financial reported its highest ever quarterly revenue of INR 1,214 crores, driven by strong performance in fees, commission, brokerage, advisory, investment banking, wealth management, and distribution businesses.
• Diversified loan book: JM Financial’s consolidated loan book grew by 8% year-on-year to INR 15,808 crores, with a balanced mix of wholesale, direct retail, and indirect retail segments. The wholesale mortgage book, which constitutes 50% of the loan book, registered an 8% growth year-on-year.
• Improved asset quality: JM Financial’s gross NPA ratio improved from 5.1% in Q1 FY ’24 to 4.8% in Q2 FY ’24, while the net NPA ratio improved from 2.6% to 2.3%. The SMA 2 ratio also declined from 1.9% to 0.5%. The company has taken additional provisions of INR 126 crores in the wholesale mortgage lending business and expects the NPA cycle to peak this year.
• Strong capital position: JM Financial’s consolidated net worth, excluding minority interest, stood at INR 8,364 crores, translating into a book value of INR 87.6 per share. The debt-to-equity ratio was at 1.5x, with 77% of the borrowings from long-term sources. The company raised INR 1,388 crores through long-term borrowings in H1 FY ’24.
• Positive outlook: JM Financial is optimistic about the future prospects of its businesses, as it leverages its diversified and integrated platform, digital capabilities, market insights, and customer relationships. The company expects to grow its wholesale mortgage book at 18-20% annually, double its investment banking profit in 4 years, and achieve 25-30% growth in its retail and FIFG businesses. The company also aims to pursue newer possibilities and harness emerging opportunities in the financial sector.