JM Financial - Another stellar year; fund-based business to help sustain growth momentum: CRISIL

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26 Aug, 2025 12:21

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CRISIL's research report on JM Financial

 
Mirroring the growth streak of the past four years, leading financial services provider JM Financial Ltd (JM) recorded healthy performance in FY17 led by the fund-based and investment banking, wealth management & securities (IWS) businesses. Driven primarily by real estate, the fund-based business (the group’s mainstay) delivered robust performance with loan book growth of 58% in FY17, while maintaining gross non-performing assets (GNPAs) at 0.1%. The company is well positioned in the ARC business as well, with focus on asset resolution while cautiously acquiring stressed assets. In the IWS business, the company has benefitted from robust activities in the capital markets and has strengthened its competitive position as a leading M&A advisory firm by executing several marquee deals. JM’s 1) proven track record of risk management in the lending business along with improving prospects in the real estate sector, 2) foray into affordable housing finance and SME lending towards the end of 2017, and 3) sustained buoyancy in the capital markets are a good augury for medium-term growth. We, thus, maintain our fundamental grade of 4/5.

We value JM by the sum of the parts (SoTP) method and our fair value estimate as on FY18 is raised to  Rs. 150 per share. We value the lending business at a price-to-book (P/B) multiple of 3x FY18E book value and the IWS business at a price-to-earnings (P/E) multiple of 15x FY18E earnings. At the current market price of  Rs. 143 per share, our valuation grade is 3/5.

 Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

CRISIL Limited. All Rights Reserved. Published under permission from CRISIL"

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