Concall AI

JM Financial Limited — Q4 FY25 earnings call

Call held 13 May 2025

Management summary

JM Financial reported a stable Q4 FY25 with PAT of Rs. 210 crores, driven by strong fee income growth and a significant reduction in impairment provisions. The company continued its strategic pivot to an asset-light model, substantially reducing its wholesale loan book and consolidating its credit solutions business. Key segments like Wealth Management and Mutual Funds demonstrated robust AUM growth, while the Corporate Advisory business maintained high profitability and a strong pipeline. Management expressed confidence in future growth and dividend payouts.

Highlights

Wholesale loan book reduced from ~Rs. 7,500 crores (March 2024) to ~Rs. 3,570 crores (March 2025).
Income from fees, commissions, and brokerage increased 22% Q-o-Q to Rs. 435 crores in Q4 FY25.
Impairment on financial instruments significantly reduced to Rs. 7 crores in Q4 FY25 from Rs. 117 crores in Q3 FY25.
Profit after tax (PAT) stood at Rs. 210 crores in Q4 FY25; pro forma PAT (with consolidation) was Rs. 238 crores, up 13% Q-o-Q.
Wealth Management AUM grew 11% Y-o-Y to ~Rs. 1.1 lakh crores, with non-retail recurring AUM up almost 50% Y-o-Y to ~Rs. 19,000 crores.
Mutual Fund AUM doubled in the last year to ~Rs. 13,400 crores.
Consolidated net worth (excluding minority interest) was Rs. 9,675 crores, with book value per share at Rs. 101.
Board recommended a dividend of Rs. 2.7 per share, the highest ever from operating profits.

Concerns

RBI regulatory changes impacting wholesale mortgage lending

Key financials

5 periods

Headline

Income from Fees, Commissions & Brokerage
₹435 Cr
QoQ +22%
Consolidated Net Worth (ex minority interest)
₹9,675 Cr
Book Value Per Share
₹101
Dividend Per Share
₹2.7
Group Level Borrowing
₹11,400 Cr
Cash
₹3,600 Cr

Q4 FY25

Impairment on Financial Instruments
₹7 Cr
PAT
₹210 Cr

Q4 FY25 with consolidation

Pro forma PAT
₹238 Cr
QoQ +13%

FY25

Impairment on Financial Instruments
₹425 Cr

FY25 ex ARC/NBFC

Income from Fees, Commissions & Brokerage
₹1,407 Cr
YoY +15%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	1,191	1,106	1,004	1,111	1,031 −13%	999 −10%	949 −5%	1,201 +8%
Expenses	700	500	426	261	426	436	458	500
EBITDA	491	607	578	850	605 +23%	563 −7%	491 −15%	700 −18%
Margin	41%	55%	58%	76%	59%	56%	52%	58%
Other income	21	14	23	10	13	105	20	24
Interest	343	318	274	251	254	248	246	247
Depreciation	15	16	16	17	19	20	22	22
Profit before tax	154	287	311	593	344 +123%	400 +39%	243 −22%	456 −23%
Tax rate	6%	28%	25%	23%	26%	24%	34%	19%
Net profit	144	207	235	459	262 +82%	318 +54%	162 −31%	369 −20%
EPS	2.43	2.19	2.19	4.75	2.82	3.27	1.73	3.05

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

JM Financial Home Loans
₹100 Cr Total Income (Q4 FY25)₹369 Cr Total Income (FY25)₹59 Cr PAT (FY25)₹2,830 Cr AUM₹800 Cr Net Worth8.5% ROE2.5% ROA2× Leverage
Wealth Management
₹1.10L Cr AUM₹19,000 Cr Non-retail Recurring AUM₹1,583 Cr SEBI Margin Financing Book
JM Financial Asset Management
₹13,400 Cr AUM₹43 Cr Total Revenue (FY25)₹13 Cr Management Fees (Q4 FY25)
Private Markets (Credit Solutions)
₹2,800 Cr Real Estate Book₹1,000 Cr Provisions (Real Estate)26% Coverage (Real Estate Book)

Guidance & targets

Loan Book

Wholesale Loan Book (Real Estate, Financial Institutions, MSME) Loan Book · March 31, 2025 · High confidence ~Rs. 3,570 crores

Previously ~Rs. 7,500 crores → ~Rs. 3,570 crores

the loan book across wholesale real estate including land funding, financial institution financing and MSME has run down from approximately Rs. 7,500 crores as of March 31, 2024, to ~Rs. 3,570 crores as of March 31, 2025.

— Vishal Kampani
Private Market Business Book (Real Estate + Corporate/Bespoke) Loan Book · Medium confidence Rs. 8,500-10,000 crores

And if we are able to maintain even Rs. 2,500 crores to Rs. 3,000 crores real estate book and a corporate plus bespoke book of another 6,000 to 7,000, I think there is a very good earnings potential in the private market business at a net debt equity of 1x.

— Vishal Kampani
Private Market Business Book Loan Book · 3 years · Medium confidence ~Rs. 10,000 crores

But the growth plan takes us to around a Rs. 10,000 crores-ish book is the objective in a matter of coming three years.

— Vishal Kampani

Recoveries

Provision Recovery Recoveries · next 3-4 years · High confidence Rs. 1,000 crores

So, I expect that this Rs. 1,000 crores we should be able to recover over the next 3 years to 4 years, and there is no further provision needed.

— Vishal Kampani
Provision Recovery (from Rs. 1,000 crores total) Recoveries · FY26, FY27, FY28 · High confidence Rs. 300 crores each year

Assume out of Rs. 1,000 crores, we will recover one-third this year, one-third in FY27 and one-third in FY28.

— Vishal Kampani

Dividend

Dividend Payout Ratio (Corporate Advisory/Capital Markets) Dividend · High confidence >50%

And we feel that we should have a payout ratio in excess of 50% in that business.

— Vishal Kampani
Dividend Payout Ratio (Private Markets) Dividend · next two years · High confidence 40-50%

And again, as we are well capitalized, we should be able to again sustain between 40% to 50% payout ratio in terms of profits of that business as dividend.

— Vishal Kampani
Dividend Per Share Dividend · another 3 years · Medium confidence Double current Rs. 2.7

From Rs. 2.7 today

And if profitability continues, which I am fairly confident it will, we should be able to double dividend in another three years as well.

— Vishal Kampani

Profitability

Blended Return on Capital (Private Markets + Corporate Advisory/Institutional Equity) Profitability · Medium confidence High teens

I think the blended return on that capital that we are deploying should be in the high teens.

— Vishal Kampani
Interest Income vs Other Income Mix Profitability · next 4-5 years · Medium confidence Reverse current trend (Interest income up, Other income down)

Over the next four to five years, you will again see it reverse. You will see interest income going up and other income coming down.

— Vishal Kampani

Home Loans

AUM Home Loans · FY27 · High confidence Rs. 5,000 crores

From Rs. 2,830 crores today

So, we will take this business AUM from Rs. 2,830 crores and by FY27 we will be at Rs. 5,000 crores

— Manish Sheth
AUM Home Loans · FY30 · High confidence Rs. 10,000 crores

From Rs. 2,830 crores today

and by FY30 we will be at Rs. 10,000 crores at that rate.

— Manish Sheth
Branch Network Home Loans · FY28 · High confidence ~200 branches

From 128 branches today

our branches will grow from 128 today to roughly 200 branches by FY28

— Manish Sheth
Branch Network Home Loans · FY30 · High confidence ~275 branches

From 128 branches today

and roughly 275 branches by FY30.

— Manish Sheth
ROE Home Loans · FY28 · High confidence 11.5-12%

From 8.5% today

We are budgeting that we will be at roughly 11.5% to 12% in FY28 assuming a leverage of 3x

— Manish Sheth
ROE Home Loans · FY30 · High confidence ~14%

From 8.5% today

and roughly 14% by FY30.

— Manish Sheth
ROA Home Loans · FY27 · High confidence 2.5-3.0%

From 2.5% today

And that means we will take our ROA up from 2.5% to around ~3.0% by FY27.

— Manish Sheth

Business Growth

Overall Business Growth Business Growth · next 2-3 years · Medium confidence Tremendous growth

we look forward to tremendous growth over the next two to three years in all of our businesses.

— Vishal Kampani

Risks & concerns

RBI regulatory changes impacting wholesale mortgage lending
high

RBI regulations on increasing provisions and clarity on land finance/early stage approval financing through NBFCs led to shrinking the wholesale mortgage book.

Management acknowledged
Volatility in SEBI margin financing book
medium

There was some volatility in the SEBI margin financing book in Q4, with management hoping for stabilization and growth.

Management acknowledged
Slowdown in real estate sales impacting builder financing demand
medium

No surge in financing requirements from builders yet due to sales slowdown, but a continued lag could lead to increased demand for construction finance.

Management acknowledged
Lack of resolution progress on Unitech asset in ARC
medium

The Unitech asset is the only major distressed asset without significant resolution progress, though Supreme Court has suggested a settlement.

Management acknowledged

Q&A highlights

3 direct

Private Markets business strategy and capital deployment Direct

So, I expect that this Rs. 1,000 crores we should be able to recover over the next 3 years to 4 years, and there is no further provision needed. And if we are able to maintain even Rs. 2,500 crores to Rs. 3,000 crores real estate book and a corporate plus bespoke book of another 6,000 to 7,000, I think there is a very good earnings potential in the private market business at a net debt equity of 1x.

This question probed into the future direction of the core private markets business, capital allocation, and expected returns, which is central to the company's strategic pivot.

Asked by Digant Haria

Assessment of core profitability given 'net gain on fair value changes' Direct

I think what Nishit was trying to explain to you even the Mutual Fund investments that we make, which are in the nature of liquid Mutual Funds, right, which is the earnings from the cash that we have had on balance sheet. So, we have had on an average basis the highest cash on balance sheet last year because the payout of Rs. 1,500 crores for Credit Solutions also happened in the last two weeks of March, right?

This question directly challenged how investors should interpret the company's reported profits, distinguishing between core operating income and mark-to-market gains from treasury investments, which is crucial for understanding sustainable earnings.

Asked by Ravi Purohit

Outlook on the Distressed Credit (ARC) business and legacy asset resolution Direct

I think barring three assets, I think everything is resolved. In fact, cash is also getting collected. The only big asset which we mentioned last time as well is Unitech, which has not seen any progress on resolution.

This addressed the long-standing issue of legacy stressed assets and their impact on ARC profitability, providing clarity on the resolution status and future expectations for this segment.

Asked by Hari Kumar

3 min read 6 chapters

Detailed narrative

Strategic Pivot and Loan Book Rundown

JM Financial has significantly advanced its strategic pivot to an off-balance sheet model, reducing its wholesale loan book (real estate, financial institutions, MSME) from approximately Rs. 7,500 crores as of March 31, 2024, to Rs. 3,570 crores by March 31, 2025. This substantial reduction of over 50% was achieved with minimal balance sheet impact. The company aims to maintain a real estate book of Rs. 2,500-3,000 crores and build a corporate plus bespoke book of Rs. 6,000-7,000 crores, targeting a total private market business book of around Rs. 10,000 crores within three years, with a net debt-to-equity of 1x.

Strong Fee Income Growth and Reduced Impairments

The company reported a robust 22% quarter-on-quarter increase in income from fees, commissions, and brokerage, reaching Rs. 435 crores in Q4 FY25. For the full year FY25, this income stream (excluding ARC and NBFC) grew 15% year-on-year to Rs. 1,407 crores. Concurrently, impairment on financial instruments saw a significant reduction to Rs. 7 crores in Q4 FY25, down from Rs. 117 crores in the previous quarter. Total provisions over the last two years aggregated to Rs. 1,000 crores, with management confident of recovering approximately Rs. 300 crores annually over the next three years.

Wealth and Asset Management Momentum

JM Financial's Wealth Management business achieved an AUM of approximately Rs. 1.1 lakh crores, marking an 11% year-on-year increase. Notably, the non-retail recurring AUM surged by almost 50% year-on-year, from Rs. 12,500 crores to Rs. 19,000 crores. The Mutual Fund business also demonstrated strong growth, with its AUM doubling in the last year to approximately Rs. 13,400 crores. Management fees for the Asset Management segment in Q4 FY25 increased 1.4x compared to the prior year, reaching Rs. 13 crores.

Affordable Home Loans Expansion

The Affordable Home Loans business continues its growth trajectory, with AUM increasing over 26% year-on-year to approximately Rs. 2,830 crores. The business currently operates through 128 branches and aims for significant expansion, targeting an AUM of Rs. 5,000 crores by FY27 and Rs. 10,000 crores by FY30. The branch network is projected to grow to around 200 by FY28 and 275 by FY30. Profitability is also expected to improve, with ROE targeted to reach 11.5-12% by FY28 and approximately 14% by FY30, up from the current 8.5%.

Dividend Policy and Capital Allocation

The Board recommended a dividend of Rs. 2.7 per share, marking the highest dividend ever from operating profits. Management expressed confidence in sustaining high dividend payout ratios, targeting over 50% for Corporate Advisory/Capital Markets and 40-50% for Private Markets. Vishal Kampani stated that if profitability continues, the company aims to double its dividend again in another three years, following a doubling over the past three years. The company plans to deploy approximately Rs. 2,800 crores from its Rs. 5,000 crores treasury assets back into businesses, retaining Rs. 2,000-2,200 crores in cash.

Distressed Credit and Unitech Resolution

The Alternative and Distressed Credit (ARC) business saw its best collection year last year, recovering approximately Rs. 1,300 crores and significantly reducing debt. Management expects a turnaround in profitability for this segment in the current and next fiscal years. While most legacy assets are resolved or in advanced stages of resolution, the Unitech asset remains the only major one without significant progress. However, recent Supreme Court directives suggest a potential settlement, which management is awaiting. The company's ARC strategy focuses on partnerships with high-quality corporate clients and secured retail assets, avoiding a full-blown retail collections business due to high operating costs.

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

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