1. At a Glance
A ₹2.08 lakh crore behemoth that somehow has aP/E of 130while delivering aROE of just 1.23%. It’s like buying a Ferrari to run a milk delivery service — shiny, over-engineered, but… where’s the speed? Jio Financial isn’t your regular NBFC — it’s the financial Avengers of Reliance Group, with lending, insurance, payments, investing, leasing ships, leasing AirFiber devices, and soon maybe leasingsolar panels to aliens. All this, while having an operating margin that would make most banks cry in shame —74% OPM— yet the bottom line isn’t exactly setting the stock chart on fire.
2. Introduction
In the corporate reincarnation game,Jio Financial Serviceshas one of the smoothest births — spun off from Reliance Industries, sprinkled with regulatory blessings, and backed by Mukesh Ambani’s war chest. Think of it as the financial arm of Reliance, but instead of just giving you loans, they’ll also insure your fridge, handle your UPI payments, and manage your mutual funds while leasing you a ship if you’re feeling pirate-y.
While most NBFCs spend decades fighting for distribution, JFSL just plugged itself into the Jio ecosystem — MyJio app, Jio Finance app, 16,000+ business correspondent points in the pipeline — and voilà, instant network effect.
The catch? All that power still needs time to translate into big, consistent earnings. Yes,sales are up 46.6% YoYin the latest quarter, but profits actually dipped by 3.23%. In short: the party is just starting, the DJ is here, but the dance floor’s still half empty.
3. Business Model (WTF Do They Even Do?)
This is not just a lender — it’s a financial theme park.
a) Lending & Leasing
- ThroughJio Finance Ltd: consumer loans, corporate loans, MSME funding, loans against property, vendor financing, even loans against mutual funds.
- ThroughJio Leasing Services Ltd: “Device-as-a-Service” (AirFiber devices now, solar panels & IT equipment coming soon). Also, a JV for ship leasing — because why not?
b) Payments
- Jio Payments Bank+Jio Payment Solutions— CASA base of 1.5 million customers, UPI, cards, payment gateways. Expanding BC outlets to 16,000.
c) Protect (Insurance)
- ThroughJio Insurance
- Broking Ltd: Ties with 31 insurers, sells life, health, auto, shopkeeper insurance, and even extended warranties for consumer durables.
d) Invest
- JV withBlackRockfor AMC & wealth management — aiming to shake up India’s mutual fund market.
This is basically Reliance’s way of saying: “We will own every single rupee you spend, save, borrow, invest, or insure.”
4. Financials Overview
YoY/QoQ Snapshot (Latest Quarter)
| Metric | Latest Qtr (₹ Cr) | YoY Qtr (₹ Cr) | Prev Qtr (₹ Cr) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 612 | 417 | 493 | 46.6% | 24.1% |
| EBITDA | 456 | 343 | 338 | 33.2% | 34.9% |
| PAT | 325 | 336 | 316 | -3.2% | 2.9% |
| EPS (₹) | 0.51 | 0.53 | 0.50 | -3.8% | 2.0% |
Commentary:
- Revenue growth is flashy (thanks to scaling new businesses), but PAT dipping despite 74% OPM shows the profit engine still has tuning issues.
- EPS is small change for a ₹2 lakh crore market cap. That P/E ratio is currentlymore optimism than earnings.
5. Valuation (Fair Value RANGE only)
Method 1 – P/E Approach
- Current EPS (TTM) = ₹2.56
- Assigning a reasonable NBFC P/E range = 25–35
- FV Range = ₹64 – ₹90
Method 2 – EV/EBITDA Approach
- EBITDA (TTM) = ₹1,661 Cr
- EV/EBITDA range for large NBFCs = 15–20
- FV Range = ₹1,250 – ₹1,660 Cr EV → Per share range ≈ ₹200 – ₹265
Method 3 – DCF (Very optimistic cash flow growth 20% for 5 years)
- FV per share ≈ ₹250
