Jio Financial shares drop 6% as absence of dividend income, rise in opex hit Q3; what Centrum Broking says

Shares of Jio Financial Services Ltd (JFS) snapped a three-day winning run and fell 6 per cent in Tuesday's trade, as the absence of dividend income and rise in opex on employee addition, capacity building and CSR expenses, weighed on December quarter profit that fell 56 per cent sequentially.

At 9.16 am, Jio Financial shares were trading 6.26 per cent lower at Rs 250.10 on BSE. Ahead of its quarterly results, the stock was up 4.55 per cent on Monday, 1.47 per cent on Friday and 4.64 per cent on Thursday.

"Total consolidated comprehensive income increased by Rs 90bn (net of tax) in 3QFY24 largely reflecting increase in prices of shares held in Reliance Industries Ltd. JFSL successfully completed sandbox for consumer durables loans and personal loans, however, post RBI tightening on consumer unsecured lending the company has increased its focus on secured lending including leasing as a product," said Centrum Broking in a flash note.

JFS plans to start a wholly-owned leasing subsidiary under which it plans to provide equipment on lease to end customer. JFSL is further leveraging its eco-system and will launch Supply Chain Financing in 4QFY24, Centrum Broking said.

"Loans against Shares/MF, home loans are in pipeline while the capability for unsecured and consumer durables product is built up," it said.

JFS said it added 3 new partnership in the insurance broking, taking total partnerships
to 27. Besides, it launched embedded, extended warranty, sachet insurance during the quarter. In the Payments Bank & Payments Solution, JFS launched virtual debit cards. In Payment Solutions, Jio Financial pilot launched Jio Voice Box and an app for merchants.

"As on 2QFY24, JFSL was trading at NAV/Share (cons) of Rs182. If we add total comprehensive income of Rs92.9bn for 3QFY24, we derive NAV of Rs 197 per share," JFS said.

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