JFS outlook: Nomura said Reliance’s track record in disrupting the retail and telecom segments has been impressive but it believes lending is a secular business and a different game from the perspective of underwriting, collection and analytics.
Jio Financial Services displayed a robust performance in FY24, led by the increase in the interest income, dividend, and fees and commission income, said Arihant Capital Markets. It is positive on the future prospects of the company.
Shares of Jio Financial Services Ltd (JFS) climbed 4 per cent in Monday’s trade following its March quarter earnings. JFS’ calibrated approach to building an unsecured loan portfolio is a prudent move from the perspective of leverage build-up at the system level, analysts, who seems positive on the NBFCs new initiatives, said.
“The company has displayed robust performance during the FY24, led by the increase in the interest income, dividend, and fees and commission income. We remain positive on the future prospects of the company,” said Arihant Capital Markets.
JFS is making inroads into vendor financing and insurance distribution, said Motilal Oswal.
This brokerage said new businesses – AMC and Leasing, have also been conceptualised and noted that Jio Financial has announced expansion of its partnership with BlackRock to offer wealth management and broking services. Jio Financial Unified app is being developed and will soon be offered to the customers, Motilal said.
“Necessary framework and rule engines have been set up for each business lines. Jio brand, capital and customer adjacency with its ecosystem: These three key strengths will support sustainable growth in the future,” it said on JFS concall highlights.
Following the development, the JFS stock rose 3.71 per cent to hit a high of Rs 383.75 on BSE.
Post JFS Q4 results, Nomura India said Reliance’s track record in disrupting the retail and telecom segments has been impressive but it believes lending is a secular business and a different game from the perspective of underwriting, collection and analytics.
“Building and testing systems and underwriting algorithms may take a considerable amount of time. Further, in secured segments such as home/LAP loans, banks/large NBFCs are quite active, and it will not be easy to ramp up in secured segments,” it said.
In line with last quarter’s commentary, in response to concerns and regulatory changes around unsecured lending, the management emphasized its focus on building a secured book.
“In secured products, JFL (Jio Finance Ltd, lending NBFC arm of JFSL) has gone live with vendor financing to address the working capital needs of suppliers. It plans to launch other secured products such as Home Loans, Loan Against Property, Loan Against Mutual Funds going ahead,” Nomura India said.
Nomura said Jio Financial also plans to start leasing services under the Device as a Service (DaaS) model. The target devices would be AirFiber, phones, laptops, solar panels, EV batteries, IT equipment and ship leasse, it said.
Disclaimer: rojgarlive Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
