JM financial Ltd’s revenue grew by 28.7% yoy and 11.3% qoq to Rs933cr owing to strong growth of fund based activities. EBITDA came in at Rs715cr, up 30.9% yoy and 9.8% qoq. EBITDA margin expanded by 134bps yoy to 76.7%, however contracted by 108bps on qoq basis. Company’s adjusted Net profit stood at Rs188.8cr vs. Rs150.8cr yoy. Adjusted net profit in Q3FY18 stood at Rs168.1cr.
• Its revenue from Investment banking & securities business (Rs241.8cr) and Fund based activities (Rs648.1cr) grew by 8.5% and 35.5% respectively during the quarter.
• Finance cost grew by 43.5% yoy and 4.3% qoq to Rs307cr.
• Employee benefit expenses grew by 11.7% yoy to Rs89cr, however declined by 9.6% qoq.
• The Board declares a final dividend of Rs1.10/share of the face value of Re1/- each.
• Asset under management (AUM) of wealth management business stood at Rs31,808cr (excluding custody assets) as on Q4FY18 vs. Rs31,910cr in Q3FY18.
• Company now has coverage on over 180 stocks and cover more than 200 institutional investors.
• During the quarter, the average daily trading volume stood at Rs5,972cr.
• The lending book of JM Financial Products stood at Rs6,582cr as on March 31, 2018.
• Asset Reconstruction business saw major recoveries from restructured accounts. The outstanding Security Receipts (SRs) stood at Rs12,965cr as on Q4FY18 as compared to Rs12,500cr as on Q3FY18.
• The average AUM for mutual fund schemes during the quarter stood at Rs16,365cr vs. Rs16,633cr in Q3FY18.
Con Call Highlights
• Real estate loan book consists of 63% of total loan book. Company saw 14% yoy growth in real estate loan book this year.
• Company has successfully entered in Kolkata and NCR markets for real estate financing.
• Slowdown in margins in real estate financing is due to management’s decision to lend conservatively to prominent players. Cost of funds are in-line with the previous quarters.
• In housing finance business, 5 clusters are set up across Maharashtra and Gujarat. It plans to expand to total 15 geographies by FY19E.
• Company has been able to restructure some big accounts in FY18 and expects few bigger accounts to get restructure by FY19E.
• Company has generated 13%, 11%, 10.5% and 10.5% yields from its real estate lending, corporate lending, SME lending and capital market lending respectively.
JM Financial Ltd is currently trading at Rs. 137, down by 5.1 points or 3.59% from its previous closing of Rs. 142.10 on the BSE.
The scrip opened at Rs. 141 and has touched a high and low of Rs. 143.80 and Rs. 136.35 respectively. So far 21,19,223 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.
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