JM Financial Limited — Q1 FY26 earnings call

Call held 12 Aug 2025

Management summary

JM Financial reported a strong Q1 FY26, achieving its highest-ever operating PAT of INR454 crores and crossing INR10,000 crores in net worth. The company saw robust growth across all business units, with net revenue and pre-provisioning operating profit both increasing by 22% year-on-year. Strategic initiatives, including significant recoveries in real estate lending and ARC, and a substantial IPO pipeline, position the company for continued growth.

Highlights

  • Highest ever operating PAT at INR454 crores.

  • Net worth crossed INR10,000 crores for the first time.

  • Book value per share at INR106.4.

  • Net revenue growth of 22% year-on-year.

  • Pre-provisioning operating profit increased by 22%.

  • Non-core real estate loan book declined by 56%.

  • ARC cash recoveries of INR1,368 crores in the last 12 months.

  • Net reversal of impairment of INR204 crores.

  • Borrowing reduced by INR4,300 crores in the last 1 year.

  • IPO pipeline of INR1 lakh crores from 45 transactions.

Key financials

  1. Operating PAT ₹454 Cr
  2. Net Revenue Growth 22%
  3. Pre-provisioning Operating Profit Growth 22%
  4. Net Worth ₹10,000 Cr
  5. Book Value per Share ₹106.4

What they filed

Q1 FY27: revenue up 8.1%, net profit down 19.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,191 1,106 1,004 1,111 1,031 −13%999 −10%949 −5%1,201 +8%
EBITDA491 607 578 850 605 +23%563 −7%491 −15%700 −18%
Net profit144 207 235 459 262 +82%318 +54%162 −31%369 −20%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Corporate Advisory and Capital Markets
    ₹182 Cr Net Revenue₹96 Cr PBT₹77 Cr PAT
  • Wealth and Asset Management
    ₹225 Cr Net Revenue₹44 Cr PBT₹38 Cr PAT & Minority Interest
  • Private Markets
    62% Net Revenue Growth₹212 Cr Reversal of Impairment4 x_qoq PBT Growth12 x_qoq PAT & Minority Interest Growth
  • Affordable Home Loans
    ₹100 Cr Total Income₹14 Cr PAT
  • Treasury and other assets
    ₹47 Cr PAT

Guidance & targets

ARC Recoveries

  • Annual Recovery ARC Recoveries · next 3 years · High confidence INR250-300 crores
    we'll have almost INR250 crores to INR300 crores of recovery every year for the next 3 years.

    — Vishal Kampani

Home Loan Book Growth

  • Loan Book Size Home Loan Book Growth · in 2 years · High confidence INR5,000 crores
    We plan to grow the loan book to INR5,000 crores in 2 years

    — Vishal Kampani

  • Loan Book Size Home Loan Book Growth · by FY '30 · High confidence INR10,000 crores
    and to around INR10,000 crores by FY '30.

    — Vishal Kampani

Home Loan Business IPO

  • IPO Listing Home Loan Business IPO · 2028-2029 · Medium confidence sometime in 2028 or 2029
    And we will plan an IPO and listing of this business sometime in 2028 or 2029.

    — Vishal Kampani

IPO Pipeline Execution

  • INR1 lakh crores IPO transactions IPO Pipeline Execution · next 12 months or so · Medium confidence execute this pipeline
    I think there is a good chance that we should be able to execute this pipeline in the next 12 months or so.

    — Vishal Kampani

Corporate Advisory & Capital Markets Sales Growth

  • Sales Growth Corporate Advisory & Capital Markets Sales Growth · this year · High confidence 0.20
    So, a 20% growth is what we are targeting this year, ma'am? Yes, it is.

    — Sonia Dasgupta

Corporate Advisory & Capital Markets Sales

  • Sales Corporate Advisory & Capital Markets Sales · this year · High confidence INR900-1,000 crores

    Previously INR788 crores (FY25) → INR900-1,000 crores

    if markets remain stable and we see the IPO pipeline unfolding in 3Q and 4Q, can we see, say, a 20% growth for this year, like INR788 crores sales for FY25 and possibly an INR900 -1,000 crores sales this year? Yes, it is.

    — Sonia Dasgupta

IPO Pipeline Revenue Translation

  • Revenue from INR1 lakh crores issuance IPO Pipeline Revenue Translation · High confidence INR500-750 crores
    If there is an INR1 lakh crores issuance, assuming roughly around 3 banks, you make 2% to 3%. So, the revenue can be anywhere between INR500 crores to INR750 crores.

    — Nishit Shah

Equity AUM Net Yield

  • Net Yield Equity AUM Net Yield · next 6 months to a year · High confidence 30 bps

    Previously 25 to 27 basis points → 30 bps

    So, the target is to cross 30 over the next 6 months to a year.

    — Amitabh Mohanty

Real Estate Loan Book Growth (Cash Flow Backed)

  • Loan Book Growth Real Estate Loan Book Growth (Cash Flow Backed) · next 2 to 3 years · High confidence 0.15-0.20
    real estate should be able to grow at a 15% to 20% loan book growth on cash flow backed comfortably year-on-year for the next 2 to 3 years.

    — Vishal Kampani

Home Loan Business Stake Sales

  • Additional Stake Sales Home Loan Business Stake Sales · over the next 3 years · Medium confidence 1 or 2 more partners
    when we do an IPO, we will, over the next 3 years, maybe do a couple of more stake sales like we have done with Bajaj, invite maybe 1 or 2 more partners in the cap table.

    — Vishal Kampani

Risks & concerns

  • Mispricing due to ample liquidity in private markets

    medium

    Vishal Kampani stated, 'when there is a lot of liquidity, there can be mispricing... we will choose to stay away and that DNA will not change.'

    Management acknowledged

  • Cyclicality of Equity Capital Markets business

    medium

    Vishal Kampani mentioned, 'equity capital markets business, I've always said, is an 8-month business in 12 months.' Chirag Negandhi added, 'the cyclicality... is not as cyclical as you're making it out to be because it's spread across different businesses that all complement each other.'

    Management acknowledged

  • Competition and talent poaching in Wealth Management

    medium

    Prolin Nandu asked about 'competition in acquiring talent' and 'poaching.' Chirag Negandhi responded, 'We want to build a solid team. We believe this is a long-term business... we will stay away from such people [opportunistic from 6-12 month timeframe].'

    Analyst acknowledged

Areas of evasion (1)

  • Not disclosing specific IRRs for the Juhu property transaction.

Q&A highlights

3 direct
Wealth Management Opex and Future Profitability Direct
we are at an investing phase in the wealth management business... you should expect that we continue to grow definitely on a year-on-year basis.

Addresses concerns about rising costs due to new hires and clarifies the long-term growth strategy and expectation of continuous year-on-year growth despite upfronting costs.

Asked by Digant Haria

Wealth Management PAT Margins vs. Peers Direct
The margins are slightly lower because as you see in the presentation, the expansion plans are being loaded into the P&L... the operating leverage will also kick in and you will see the margins improve.

Explains the current lower profitability in wealth management as a result of strategic investments and hiring, indicating future margin improvement as operating leverage kicks in.

Asked by Anubhav Goel

Rationale for Home Loan Stake Sale and Future IPO Direct
the first reason to do the transaction is obviously to invite a good strategic investor, long-term investor in the company... But the principal reason was to establish a valuation for the business.

Clarifies the strategic intent behind the partial stake sale in the housing finance business, highlighting the dual benefits of attracting a long-term strategic partner and establishing a valuation benchmark for a future IPO.

Asked by Prolin Nandu

2 min read 7 chapters

Detailed narrative

Strong Q1 FY26 Performance and Net Worth Milestone

JM Financial reported its highest-ever operating PAT of INR454 crores in Q1 FY26, demonstrating stellar results across all business units. The company's net worth surpassed INR10,000 crores for the first time, with a book value per share reaching INR106.4. This strong performance was driven by a 22% year-on-year growth in both net revenue and pre-provisioning operating profit.

Strategic Recoveries and Balance Sheet Deleveraging

The company achieved a net reversal of impairment of INR204 crores, significantly aided by a 56% decline in its non-core real estate loan book. Over the last 12 months, the ARC business contributed INR1,368 crores in cash recoveries. Furthermore, JM Financial reduced its overall borrowing by INR4,300 crores in the past year, while still maintaining strong operational growth.

Robust Growth in Capital Markets and Advisory

The Corporate Advisory and Capital Markets segment saw net revenue increase by 53% year-on-year to INR182 crores, with PAT growing 88% to INR77 crores. The company reported a substantial IPO pipeline of INR1 lakh crores from 45 transactions, with management expressing confidence in executing this pipeline over the next 12 months, potentially generating INR500-750 crores in revenue.

Investment Phase in Wealth and Asset Management

The Wealth and Asset Management segment's net revenue grew 29% year-on-year to INR225 crores, and PAT increased by 69% to INR38 crores. Recurring AUM rose 37% year-on-year to INR31,180 crores. Management indicated that the segment is in an 'investing phase,' with significant headcount additions (RMs up 91% YoY to 174), which is impacting current PAT margins but is expected to drive continuous year-on-year growth and improved operating leverage in the future.

Home Loan Business Expansion and Future IPO Plans

The affordable home loan business reported an 8% year-on-year increase in total income to INR100 crores. JM Financial aims to grow its home loan book to INR5,000 crores in the next two years and INR10,000 crores by FY30. The recent divestment of a 2.1% stake to Bajaj Allianz Life Insurance was primarily to establish a valuation for the business, with plans for an IPO and listing sometime in 2028 or 2029, potentially preceded by additional stake sales.

Real Estate Lending Book Stabilization and Growth Outlook

The real estate loan book has stabilized at INR2,000 crores, with INR620 crores classified as NPA but fully provided for, resulting in a net book of INR1,400 crores with no payment delays. The company plans to grow its cash flow-backed real estate loan book by 15-20% year-on-year over the next 2-3 years, focusing on high-quality counterparties and avoiding mispricing.

Syndication Business and Risk Management Philosophy

JM Financial is making strong progress in its syndication business, with mandates expected to convert into revenue in the next 3 quarters. Management emphasized a disciplined approach to risk-adjusted returns, stating they would avoid mispriced opportunities even amidst ample liquidity. This strategy reflects a commitment to balance sheet quality over aggressive growth, drawing lessons from past market cycles.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls