Hold Jio Financial Services; target of Rs 345: KR Choksey

KR Choksey recommended hold rating on Jio Financial Services with a target price of Rs 345 in its research report dated October 21, 2024.

Broker Research

October 22, 2024 / 11:49 IST

Hold

26 Aug, 2025 12:21

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KR Choksey's research report on Jio Financial Services

Net Interest Income (NII) for Q2FY25 stood at INR 2,050 Mn, a growth of 10.2% YoY/ 26.7% QoQ. Pre-Provision Operating Profit (PPOP) was INR 3,388 Mn, a decline of 6.0% YoY but grew by 6.9% QoQ, led by higher dividend income. The cost-to-income ratio stood at 31.4% as against 18.9% in Q1FY25 (vs. 18.3% in Q2FY24). The operating expenses saw an increase of 99.3% YoY/ 80.1% QoQ. Profit after Tax (PAT) for Q2FY25 was INR 6,891 Mn, reporting a growth of 3.1% YoY/ 120.4% QoQ. The sequential improvement was led by the low base of Q1FY25 due to seasonal weakness. We anticipate that earnings will continue to be variable until JIOFIN secures all necessary approvals and successfully transitions into the ramp-up phase. Hence, we have maintained our rating at “HOLD”.

Outlook

We value the NBFC based on its September 30, 2024, book value of INR 215.9 per share. 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 345 per share (earlier INR 350). Given the 4.6% upside over CMP, we maintain our “HOLD” rating on the shares of Jio Financial Services Ltd.

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