Summary
JM Financial Limited - Q3 FY26 Earnings Call Summary Friday, February 06, 2026 2:00 PM
Event Participants
Executives 6 Amitabh, Chirag Negandhi, Manish Sheth, Nishit Shah, Sonia Dasgupta, Vishal Kampani
Analysts 8 Aadarsh (Negen Capital), Akshay Jawahar (Individual), Dhruv Zobalia (Prospero Tree), Dhruvesh Sanghvi (Prospero Tree), Digant Haria (GreenEdge Wealth), Himanshu Upadhyay (Steadfort Investments), Shubhranshu Mishra (PhillipCapital), Sudharsan (Prosperity Wealth)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated PAT | ₹313 crores | +50% YoY; includes ₹113 crores interest on tax refund and ₹21 crores labor code impact. |
| Operating PAT | ₹244 crores | +17% YoY; excludes exceptional items, reflects growth in fee-based income. |
| Fees & Commission | ₹306 crores | +32% YoY; driven by strong investment banking pipeline and wealth management. |
| Consolidated Net Worth | ₹10,418 crores | Excludes minority interest; results in a book value per share of ~₹109. |
| Focus Loan Book | ₹4,200 crores | Stable QoQ; yield remains at approximately 13.5%. |
| Total AUM (Affordable Housing) | ₹3,200 crores | +23% YoY; customer base crossed 30,000 across 135 branches. |
| Recurring Wealth AUM | ₹33,100 crores | +33% YoY; recurring AUM now represents 29% of total wealth AUM. |
| GNPA (Home Loans) | 0.26% | Significant improvement from ~1% YoY following a ₹57 crore NPA sale to a third-party ARC. |
| Cash & Liquid Investments | ₹3,200 crores | Declined from ₹5,800 crores due to the buyout of minority stake in JM Financial Credit Solutions. |
Geographic & Segment Commentary
- Corporate Advisory & Capital Markets (CACM): Net revenue increased 30% YoY to ₹210 crores with 12 capital market transactions closed during the quarter totaling ₹36,000 crores. The segment maintains a massive pipeline of 54 filed IPOs worth ₹121,000 crores, though execution timing remains dependent on market volatility.
- Wealth & Asset Management: Revenue grew 7% YoY to ₹181 crores, but operating PAT fell to ₹19 crores due to aggressive investment in talent (RM count +41% YoY to 1,057) and digital infrastructure. Management expects this “investment phase” to continue through mid-2026 to scale the franchise.
- Private Markets (Credit & Distressed): Operating PAT grew 82% YoY to ₹111 crores despite a deliberate 90% reduction in the wholesale real estate book over recent years. The segment is pivoting towards a syndication-heavy model, recently closing a ₹3,300 crore transaction for Vodafone.
- Affordable Home Loans: Revenue increased 27% YoY to ₹118 crores with 50% of the business originating from Maharashtra and Gujarat. The segment saw a return to normalized collection efficiency and a clean-up of the balance sheet via a cash-basis NPA sale.
Company-Specific & Strategic Commentary
- Subsidiary Consolidation: Completed the buyout of minority partners in JM Financial Credit Solutions, making it a 100% subsidiary and simplifying the corporate structure.
- AIF Expansion: Received SEBI approvals for two new Alternative Investment Funds (Real Estate and Pre-IPO), intended to build recurring AUM and leverage the investment banking pipeline.
- Syndication Pivot: Shifting focus from balance-sheet heavy lending to a “capital light” syndication model to improve ROEs while maintaining client relationships.
- Asset Recovery: On track to recover ₹1,000 crores from the NBFC book and ₹500 crores from the ARC; approximately ₹260-270 crores in cash has already been released in the first nine months.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Loan Book Growth | ~20% YoY | Target for the next 3 years, though fee-based syndication will be prioritized over “hold” positions. |
| Affordable Housing Growth | >25% YoY | Management expects to maintain this pace for the next 3 years via calibrated expansion. |
| Wealth RM Hiring | Pause after July 2026 | Recruitment phase to conclude by mid-2026, followed by an intense focus on productivity gains. |
| CACM Revenue Growth | 15% - 20% CAGR | Based on India’s capital markets expanding at 1.5x to 2x GDP growth over a 5-7 year horizon. |
Risks & Constraints
| Risk | Context |
|---|---|
| Market Volatility | Capital market transaction execution (IPOs/M&A) is sensitive to FPI flows and geopolitical shifts, causing quarter-to-quarter earnings lumpiness. |
| Talent Inflation | High competition for quality talent in the investment banking and wealth space is driving up employee costs and impacting short-term margins. |
| Real Estate Cycle | Management noted the “rosy period” of residential sales is normalizing, which may necessitate more cautious construction finance underwriting. |
Q&A Highlights
Wealth Management Profitability
- Question: Why did wealth profitability decline despite a bull market? (Aadarsh)
- Answer: It is a combination of lower transactional revenue this quarter and heavy front-ended opex from doubling the RM count. Management views this as a “long-haul” investment phase (Nishit Shah/Chirag Negandhi).
Housing Finance NPA Drop
- Question: What led to the drastic fall in Home Loan GNPA to 0.26%? (Himanshu Upadhyay)
- Answer: Sold ₹57 crores of gross NPAs to a third-party ARC for 100% cash. The sale did not hit the P&L as existing provisions were sufficient (Manish Sheth).
Deal Execution Pipeline
- Question: What is stopping the execution of the 54 filed IPOs? (Dhruv Zobalia)
- Answer: Purely market volatility and timing. Over 30 deals already have SEBI approval and will launch as soon as market conditions stabilize (Vishal Kampani/Sonia Dasgupta).
Capital Allocation
- Question: How are you thinking about the ₹24,000 crore balance sheet? (Dhruvesh Sanghvi)
- Answer: Private Markets capital is being optimized through dividends rather than bloating the book. Home loans are fully capitalized for 5 years of growth. Surplus cash will be deployed into higher-yielding loans as the wholesale book stabilizes (Vishal Kampani).
Key Takeaway
JM Financial delivered a quarter characterized by high strategic activity, with consolidated 9M PAT crossing ₹1,000 crores. While headline numbers were bolstered by a ₹113 crore tax refund, core operating PAT grew a healthy 17% YoY. The firm is aggressively pivoting from a balance-sheet lender to a fee-driven powerhouse, evidenced by a 32% jump in fee income and a massive ₹1.21 lakh crore IPO pipeline. Significant capital was deployed to consolidate JM Financial Credit Solutions into a 100% subsidiary, while the Wealth and Asset Management divisions remain in a heavy investment phase, with RM counts up 41%. Management is signaling a transition toward capital-light syndication and recurring AUM growth, aiming for mid-teen ROEs across segments by FY28. Despite short-term margin pressure from hiring and market-linked volatility, the firm remains positioned to capture the long-term expansion of India’s capital markets.
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