Company Update : Jio Financial Services Ltd By Motilal Oswal Financial Services Ltd
PAT flat YoY; focusing on both expansion and execution
* Jio Financial’s (JFSL) 3QFY25 NII declined ~22% YoY to INR2.1b (PY: ~INR2.7b). Other income grew ~64% YoY to INR2.4b, which included investment income of ~INR1.9b (PY: INR1b).
* Opex rose ~20% YoY to INR1.2b (PY: ~INR1b). Employee expenses declined ~20% QoQ to INR540m. Operating expenses in 2QFY25 was higher because of CSR expenses and new business incorporation expenses.
* PPoP grew ~5% YoY to INR3.3b. Credit costs in 3QFY25 stood at INR123m (NIL in 3QFY24). The share of profits from JVs and associates declined ~11% YoY to ~INR590m (PY: ~INR660m).
* 3QFY25 and 9MFY25 PAT was flat YoY at ~INR2.95b and ~INR13b, respectively.
Strong AUM growth in lending and leasing business
* Lending AUM stood at ~INR42b as of Dec’24 (vs. ~INR12b as of Sep’24). The company is driving loan-book growth by leveraging both internal synergies and external partnerships.
* The company introduced Smart Gold plans wherein customers can purchase digital gold on the Jio Finance app either through lump-sum payment or an SIP.
Enhancements in Jio Finance App
* Jio Finance app is its unified universal storefront for all its offerings. The company has accelerated its targeted marketing products by offering tailored products to customers. JFSL now has the marketing tie-up in place to leverage MyJio for customer acquisitions.
* The company has ~7.4m monthly active users (MAU) across all the digital properties of JFSL. It has also applied for a Third-party application provider (TPAP) license for its Jio Finance App.
Progress in other businesses
* Investment: Jio BlackRock Asset Management has submitted an application to SEBI for final approval. The product roadmap and the go-to-market strategy are in place, with the senior leadership and core business teams in advanced stages of buildout. It incorporated Jio BlackRock Investment Advisor to offer wealth management services in Sep’24.
* Jio Payments Bank: The payment bank saw ~25% QoQ increase in CASA customers to ~1.89mn. Payments business correspondent network was expanded to ~7,300 outlets.
* Jio Payment Solutions: JSPL received online payment aggregator license in Dec'24. JSPL saw significant tech enhancement during the quarter.
* Jio Insurance Broking: Jio Insurance launched long-term life insurance through the D2C channel during the quarter. The company added 39 new corporate clients and experienced strong sales momentum in the institutional channel, driven by its diverse product offerings. The company doubled its insurance plans QoQ to ~54 plans across five product categories: Auto, 2W, Health, Life - Term and Non-term.
Highlights from the management commentary
Business update
* With a diversified product suite, JFSL is in expansion mode, with a strong focus on operational execution.
* The company aims to enable customers to complete their entire digital process in under five minutes.
* JFSL is working on enhancing and expanding its distribution channels across business verticals.
* Payments business correspondent network is expanded to ~7,300 outlets. Payment solutions embedded in JioBharat for merchant on boarding at scale.
* Entered into a marketing tie-up to leverage the MyJio app for customer acquisitions.
* 1.89m CASA customers; all the digital properties of JFSL saw monthly average users (MAU) of 7.4m
* Jio Payments Bank received online payment aggregator license.
* Jio BlackRock Asset Management has submitted an application to SEBI for final approval. Consolidated PAT stood at INR2.95b in 3QFY25.
* Jio Finance app is its unified universal storefront for all its offering.
* JFSL has product offerings now across borrow, transact, protect and invest.
* Accelerated its targeted marketing products by offering tailored products to customers.
Lending and leasing
* NBFC AUM grew to ~INR42b from ~INR12b in 2QFY25.
* Driving loan book growth through internal synergies and external partnerships.
* Home loans are being distributed through the group ecosystem as well as partnerships with digital partners and developer tie-ups.
* The company introduced smart gold plans. Customers can purchase gold on the Jio Finance app either through a lump sum payment or an SIP.
Payments
* Jio Payments Bank and Jio Payments Solutions are driving high customer engagement.
* Small merchants can be on-boarded in less than five minutes.
* JPSL saw significant tech enhancement during the quarter.
Jio Insurance Broking
* Launched long-term life insurance through the D2C channel.
* Plans doubled QoQ to 54 plans across five product categories - Auto, 2W, Health, Life - Term and Non-term.
* The company added 39 new corporate clients and experienced strong sales momentum in the institutional channel, driven by its diverse product offerings.
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