KR Choksey's research report on Jio Financial Services
Net Interest Income (NII) for Q1FY25 stood at INR 1,617 Mn, a decline of 15.6% YoY/ 42.4% QoQ on account of lower interest income. Pre-Provision Operating Profit (PPOP) was INR 3,388 Mn, a decline of 6.0% YoY but grew by 6.9% QoQ, led by lower operating expenses. The cost-to-income ratio stood at 18.9% as against 24.2% in Q4FY24 (vs. 10.8% in Q1FY24). Profit after Tax (PAT) for Q1FY25 was INR 3,126 Mn, reporting a de-growth of 5.8% YoY. However, the net profit remained flat on a sequential basis. We have maintained our rating at “HOLD” as we await approvals being accorded to JIOFIN for the licenses applied.
Outlook
Applying a P/BV multiple of 2.0x, we further discount the value by 20% for the Holdco to arrive at a revised Target Price of INR 350 per share (earlier INR 395). Given the 3.9% upside over CMP, we maintain our “HOLD” rating on the shares of Jio Financial Services Ltd.
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