Jio Financial Services Shares Slide by Over 6% Post Q3 Result

Jio Financial Services Ltd (JFSL), the demerged entity of Reliance Industries, witnessed a 6.25% drop in its share price to ₹250.10 on the BSE after revealing its Q3 results. Net profit declined by 56% to ₹293.82 crore from ₹668.18 cr in the September quarter and a 32% slump in revenue to ₹413.61 crore from ₹608.04 crore in the September quarter. Net interest income (NII) showed a positive trend surging by 44% QoQ to ₹269.08 crore from ₹186.06 cr at the end of September 2023.

Market Response

As of now the stock is having a bit of a rollercoaster ride. It initially dropped by 6% but managed to recover 1% from its lowest point today, trading at ₹553.25. Looking back over the past month, things have been on the upswing, showing a decent 5.54% increase. Zooming out a bit more, over the last 6 months and the past year, the stock has seen gains of 1.75%. current trading at ₹253, If the stock can hold above this level investors may see further upmove.

Expert Opinions

CLSA emphasized that Jio Financial's quarterly profit, though seemingly low at ₹300 crore, is "irrelevant" as the company is in its early stages. Jio Financial is adopting a calibrated approach to expanding its secured loan products and has plans to enter new segments, such as insurance broking and payments. The company is also awaiting approval for its mutual fund business.

CLSA and Jefferies analysts both noted that Jio Financial is taking a balanced approach to growth. The company is focused on consumer loans (both secured and unsecured) and supply chain finance.

Jio Financial Services and BlackRock Move

In October 2023, Jio Financial Services and BlackRock Financial Management took a step by filing applications with the Securities and Exchange Board of India (SEBI) to venture into the mutual fund business in the country. The regulatory in-principle approval under consideretion as of now.

Jio Financial Services, previously known as Reliance Strategic Investments, underwent a demerger from Reliance Industries and officially became a separate entity on August 21. Its stock debuted at ₹265 per share on the BSE and ₹262 per share on the NSE.

Final Words

Jio Financial Services may have seen a dip in Q3 results, but experts and the market recognize the company's smart growth strategy. They're concentrating on things like consumer loans, supply chain finance, and exploring new areas in finance. Jio Financial is clearly committed to growing in the financial services sector, and that's reflected in their future plans.