JM Financial’s consolidated net profit increased by 117.01% YoY for Q1 FY22. This is the highest ever quarterly operating net profit reported.
Mumbai, July 28, 2021: The Board of Directors of JM Financial Limited, at its meeting held today, approved the unaudited financial results for the first quarter ended June 30, 2021.
Summary of Consolidated results FY 22 – Q1 compared to FY 21 – Q1
(Rs. in Cr)
June 30, 2021
June 30, 2020
|% Increase / (Decrease)|
|Profit before tax||360.40||184.17||95.69%|
|Net profit after tax and before non-controlling interest||274.78||139.61||96.82%|
|Net profit after tax, non-controlling interest and share of associate||203.14||93.61||117.01%|
The earnings per share for the quarter ended June 30, 2021 is Rs. 2.13. The consolidated net worth* as at June 30, 2021 stands at Rs. 7,154 Cr and the gross debt equity (equity of Rs. 7,154 Cr + non-controlling interest of Rs. 2,673 Cr) ratio is 1.09 times* and net debt equity of 0.69 times* (post reducing cash and cash equivalents of Rs. 3,892 Cr). The book value per share is Rs. 75.03.
Our consolidated loan book** stood at Rs. 11,014 Cr as of June 30, 2021 compared to Rs. 10,833 Cr as of June 30, 2020. Gross NPA and Net NPA stood at 3.46% and 1.89% respectively as of June 30, 2021 compared to 1.80% and 1.22% respectively as of June 30, 2020. We have made additional gross provisions (including fair value loss) of Rs. 132 Cr# on account of the uncertainties around Covid-19 for the quarter ended June 30, 2021, thereby taking the total provisions to Rs. 515 Cr# on account of the pandemic.
* Computed after reducing goodwill of Rs.52.44 Cr from shareholders’ funds and excludes borrowings for episodic financing
**Loan book does not include episodic financing book
# unaudited and based on management estimates
Segment reclassification: Until financial year 2020-21, our reportable business segments were (i) Investment banking, wealth management and securities business (IWS) (ii) Mortgage Lending (iii) Distressed credit and (iv) Asset Management.
During the quarter ended June 30, 2021, the underlying businesses of the reportable segments have been reclassified. The purpose of the said reclassification of business segments is primarily to create a client-aligned business structure to enable deeper focus, faster growth and a seamless execution of the organization’s digital strategy. Accordingly, our reclassified business segments are as follows:
Commenting on the results and financial performance, Mr. Vishal Kampani, Managing Director, JM Financial Group, said,
“We have reported our highest ever quarterly operating net profit. Our diversified business model has demonstrated time and again resilience through economic and market volatility. This new realignment of business segments will facilitate seamless execution of our strategy. Over the last few years, the integration amongst the various sub businesses in IWS has worked extremely well. We believe that the new realignment will scale our businesses from the current levels and also ensure focus on new initiatives.
The Investment Bank has demonstrated strong performance and the pipeline is robust. The Alternative and Distressed credit business witnessed significant recovery during the quarter and contributed to the overall profitability of the Group. The disbursements in the Wholesale Mortgage Lending business will pick up post travel and other restrictions are eased. The infrastructure network of Retail Mortgage Lending is being built out rapidly. Platform AWS businesses have been integrated to focus on individual customer segments’ investment and savings needs. The Platform AWS business will be actively investing in various digital initiatives to enable rapid growth and top quality customer experience.
Overall, our strong balance sheet, well capitalised and diverse set of businesses and strategic client-focused approach positions us to perform well and drive sustainable value for our stakeholders as we are hopeful about economic revival in the year ahead.”
During the quarter, our completed investment banking transactions include:
During the quarter, we acted as an arranger to the Private Placement of:
During the quarter, the average daily trading volume of our institutional equities business stood at Rs. 481 Cr.
The private equity fund, JM Financial India Fund II, has completed eight investments and has initiated the process for the fund raise for Fund III.
The total mortgage lending book (comprising of loan book of JM Financial Credit Solutions Limited and JM Financial Home Loans Limited) stood at Rs. 7,614 Cr as at June 30, 2021.
Our wholesale mortgage lending focuses on Tier - 1 cities, viz., Mumbai, Thane, Pune, Bangalore, Chennai, Hyderabad, Kolkata and NCR. Further details in respect of the wholesale mortgage lending are as under:
The last quarter has been impacted due to lockdowns faced in different geographies in different measures. Though the collections seen from projects in the quarter were still heathy, the footfalls in the projects saw a sharp decline and hence impacted the fresh sales in most projects. Having said that the general sentiment towards residential real estate remains positive and we are witnessing increased demand across ticket sizes. We are also witnessing rapid consolidation in the sector whereby the amount of sales done by top developers as a percentage of overall sales is increasing gradually and significantly. Given the reduction of the inventory overhang across geographies and the rise in demand, developers are looking at acquiring new projects and we will witness increase in new launches.
All the above have been in line with our expectations and we feel that this end user driven sales is here to stay. We are cautiously evaluating opportunities across geographies and will look at gradually increasing the lending book. However, the fear of the third wave continues to keep us cautious in underwriting loans.
Higher focus on recoveries yielded results and recoveries during quarter were about ~Rs. 1,071 Cr and Security Receipts of ~Rs. 226 Cr were redeemed. We also acquired loans of two companies during the quarter. The outstanding Security Receipts stood at Rs. 10,885 Cr as on June 30, 2021 as compared to Rs. 11,060 Cr as on March 31, 2021. The contribution of JM Financial Asset Reconstruction Company Limited towards the Security Receipts stood at Rs. 3,150 Cr as on June 30, 2021 as compared to Rs. 3,193 Cr as on March 31, 2021. Until June 30, 2021, we have acquired total outstanding dues of Rs. 62,116 Cr at a gross consideration of Rs. 17,477 Cr. Going forward, our focus would remain on recoveries and resolution while we continue to work with financial and strategic investors for acquisition.
The AUM* of our wealth businesses stood at Rs. 78,320 Cr comprising of
The average AUM of our Mutual Fund schemes during the quarter ended June 30, 2021 stood at Rs. 2,135 Cr; comprising of Rs. 522 Cr in equity schemes (including hybrid schemes) and Rs. 1,613 Cr in debt schemes (including liquid scheme). The average AUM of our Mutual Fund schemes during the quarter ended March 31, 2021 stood at Rs. 2,389 Cr; comprising of Rs. 591 Cr in equity schemes (including hybrid schemes) and Rs. 1,798 Cr in debt schemes (including liquid scheme). Mr. Amitabh Mohanty has been newly appointed as a Managing Director and Chief Executive Officer of JM Financial Asset Management Limited.
The AUM of our PMS business stood at Rs.757 Cr as on June 30, 2021 as compared to Rs.480 Cr as on June 30, 2020 and Rs.673 Cr as on March 31, 2021. Mr. Vinay Jaising has joined us as Co-Head of PMS.
During the quarter, the average daily trading volume of our retail broking business stood at Rs. 11,502 Cr.
We continued our focus on diversifying our sources and maturities for our borrowing profile. As on June 30, 2021 our long term borrowing as a proportion of total borrowing stood at approximately 81%. Borrowing through Commercial paper (CP) consisted approximately 12% of the total borrowing as on June 30, 2021. These CPs were utilised primarily towards the financing of short-term liquid assets.
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* Assets under Management (AUM) comprises distribution assets and advisory assets, as applicable
The press release and unaudited financial results are available on our website www.jmfl.com
About JM Financial
JM Financial is an integrated and diversified financial services group. The Group’s primary businesses include (i) Investment Bank (IB) shall cater to Institutional, Corporate, Government and Ultra High Networth clients and includes investment banking, institutional equities and research, private equity funds, fixed income, syndication and finance; (ii) Mortgage Lending includes both wholesale mortgage lending and retail mortgage lending (home loans, education institutions lending and LAP); (iii) Alternative and Distressed Credit includes the asset reconstruction business and alternative credit funds; and (iv) Asset management, Wealth management and Securities business (Platform AWS) shall provide an integrated investment platform to individual clients and includes wealth management business, broking, PMS and mutual fund business.
As of June 30, 2021, the consolidated loan book stood at ~Rs. 110.1 BN, distressed credit business AUM at ~Rs. 108.8 BN, wealth management AUM at ~Rs. 783.2 BN, mutual fund AAUM at ~Rs. 21.3 BN.
The Group is headquartered in Mumbai and has a presence across 575 locations spread across 177 cities in India. The equity shares of JM Financial Limited are listed in India on the BSE and NSE.
For more information, log on to www.jmfl.com or contact:
Tel.: +91 22 6630 3475
and CFO – JM Financial Products Limited
Group Chief Financial Officer
Tel.: +91 22 6630 3460
CFO – JM Financial Credit Solutions
Tel.: +91 22 6630 3360