Jio Finance at 86 PE: Overvalued or Growth Stock in the Making?

Jio Finance had fallen 50 percent from its 52-week high of Rs. 394 per share to a 52-week low of 198 and is currently trading at Rs. 230. The stock had Demerged from Reliance Industries and listed at Rs. 262 on NSE, after listing stock rallied and went up 50 percent from its listing price. 

Financial Highlights

The company reported a 5.79 percent YoY increase in revenue from Rs. 414 Crore in Q3FY24 to Rs. 438 Crore in Q3FY25. On a QoQ basis, the company reported a decrease of 36.88 percent in revenue from Rs.694 Crore in the previous quarter.

Their Net profit saw a minimal increase of 0.34 percent YoY from Rs. 294 Crore to Rs. 295 Crore for the same period. On a QoQ basis, the company reported a decrease of 57.18 percent in Net profit from Rs. 689 Crore in the previous quarter

Key Business Highlights

The company has seen Very good growth in the assets under management with a 248 percent increase from 1,206 Crore in Q2FY25 to 4,199 Crore in Q3FY25. The CASA customers for payments Bank went up by 25 percent on a QoQ basis to 1.89 million. The company now has 7.4 Million  Average Monthly active users across all digital properties of Jio Finance. The payment solutions have been embedded into Jio Bharat for merchant onboarding at scale.

Also read: 3 Stocks jumps upto 7% after promoters increases their stake in the Co.

Updates on Joint Venture With BlackRock

The company has formed a 50:50 JV for Asset Management and Wealth Management. The asset management company will be called Jio BlackRock Asset Management. The AMC company has filed a final application for final approval, and the Senior Leadership and Core Business team buildout is in the advanced stages. The Tech platform and Infrastructure deployment are going as per plan. They are Building a unified investment platform with a prime focus on operational excellence and efficiency.

In the 2nd Quarter of FY25 Both Companies Incorporated Jio BlackRock Investment Adviser for wealth management. The Recruitment of a senior leadership team for Wealth management is in progress.

Peer Comparison

The Price to Book ratio of Max Financial and Nuvama Wealth stood at 6.94 and 6.09 compared to the PB ratio of 5.62 for Jio Financial. Return on Equity for  Max Financial and Nuvama Wealth stood at 8.79 and 21.60 compared to the RoE ratio of only 1.56 for Jio Finance. 

About the Company

Jio Financial Services (JFS) is the financial services arm of Reliance Industries Limited (RIL), focusing on digital-first financial solutions across lending, insurance, asset management, and payments. JFS aims to leverage technology, AI, and data analytics to provide innovative and accessible financial products to individuals and businesses. 

Written By Abhishek Das

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