Check Before You Invest : JIO Financial Services Ltd

BSE: 543940 NSE: JIOFIN ISIN: INE758E01017

| Sector: BFSI | Industry: Finance - NBFC

Snapshot

Q.1 Which industry/sub-sector does JIO Financial Services Ltd belong to?

JIO Financial Services Ltd belongs to the BFSI sector, operating specifically within the Finance - NBFC segment.

Q.2 Is JIO Financial Services Ltd a good quality company?

JIO Financial Services Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is JIO Financial Services Ltd undervalued or overvalued?

JIO Financial Services Ltd appears Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is JIO Financial Services Ltd a good buy now?

JIO Financial Services Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of JIO Financial Services Ltd?

JIO Financial Services Ltd Operating Income growth is 26.25% for FY-2025, which is above its 5-year CAGR of 18.19%, indicating faster growth.

Q.2 Return on Assets of JIO Financial Services Ltd?

JIO Financial Services Ltd Return on Asset is 2.2%, which is in line with its 5-year historical median of 2.2%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	68.14	68.14
PPOP%	27.24	27.24
RoA%	2.2	2.2

Q.3 Return on Equity (ROE) of JIO Financial Services Ltd?

JIO Financial Services Ltd Return on Equity is 2.2% for FY-2025, which is in line with its 5-year historical median of 2.2%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of JIO Financial Services Ltd?

JIO Financial Services Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 27.24% for FY-2025, which is in line with its 5-year median(27.24%), indicating stable margins.

Q.5 Net Profit Margin of JIO Financial Services Ltd?

JIO Financial Services Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 68.14% for FY-2025, which is in line with its 5-year median( 68.14%), indicating stable margins.

Q.6 Total Asset growth of JIO Financial Services Ltd?

JIO Financial Services Ltd Total Asset growth is 2.71% for FY-2025, which is below its 5-year CAGR of 39.5%, indicating slower growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of JIO Financial Services Ltd?

Promoters hold 47.12% of the JIO Financial Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of JIO Financial Services Ltd vs Industry Peers?

JIO Financial Services Ltd AUM CAGR is 39.5%, compared to the 5-year industry median CAGR of 23.24%, indicating faster growth and gaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of JIO Financial Services Ltd vs industry peers

JIO Financial Services Ltd profit metrics are in line with the industry median level of 17.64%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	68.14	24.08
PPOP%	27.24	25.73
RoA%	2.2	3.1

Q.3 Operating efficiency of JIO Financial Services Ltd vs industry peers?

JIO Financial Services Ltd ROCE (2.6) is below the industry median of (10.9); while the current ROE (2.2) are below than the 5-year average Industry ROE (15.6). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	68.14	24.08
PPOP%	27.24	25.73
RoA%	2.2	3.1
ROCE%	2.6	10.9
ROE%	2.2	15.6

Valuation & price assessment

Q.1 Stock return of JIO Financial Services Ltd over the last decade?

Over the last 1 years, the stock has delivered a CAGR of -4.75% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	-4.8%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	238.9	344.99	28.96
Price to Book	4.37	6.98	1.11
Price to Sales	171.49	259.83	9.10
EV to EBITDA	205.27	316.95	11.77

Q.4 Valuation ratios of JIO Financial Services Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 4.37% is lower than its historical median of 6.98%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

JIO Financial Services Ltd return on invested capital (ROIC) is 2.22% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

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