Jio Financial Profit Halves to Rs 340 Cr, AUM Up 154%

Jio Financial Services reported September quarter results after market hours on Thursday, with consolidated net profit falling 51% to Rs 340 crore even as its lending book more than doubled, setting up a closely watched reaction after the stock closed flat at Rs 219.01. Net profit came in at about Rs 340 crore against Rs 695 crore a year earlier. Jio Credit’s gross AUM rose about 154% to Rs 37,320 crore, with quarterly disbursements of Rs 13,135 crore, nearly double last year. Jio Credit’s net interest income rose about 116% to Rs 302 crore and its profit after tax grew 140% to Rs 120 crore. Finance costs surged as borrowings expanded, provisions rose to Rs 41 crore from Rs 13 crore, and the share of associates and joint ventures swung from a Rs 217 crore income to a Rs 44 crore loss. The headline profit drop and the operating story point in opposite directions. Lending, payments and insurance broking are scaling quickly, but the profit line is being squeezed by funding costs on a fast-growing book and by lower contribution from group investments. Investors will judge whether the AUM ramp can eventually outgrow rising interest costs, and whether the associate swing was one-off or a recurring drag. The stock closed at Rs 219.01 on Thursday with a market cap of around Rs 1.45 lakh crore. Today’s session shows how the market weighs a 51% profit decline against very strong growth in lending, AUM and disbursements. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in Jio Financial Services. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.