KR Choksey's research report on Jio Financial Services
Net Interest Income (NII) for Q3FY24 stood at INR 2,691 Mn (a growth of 44.6% QoQ) while for 9MFY24, NII stood at INR 6,467 Mn. Pre-Provision Operating Profit (PPOP) was INR 3,156 Mn against INR 5,366 Mn in Q2FY24, a decline of 41.2% QoQ. The non-interest income decreased 65.6% QoQ owing to no-dividend income in Q3FY24. For 9MFY24, PPOP stood at INR 12,126 Mn. The cost-to-income ratio stood at 23.8% as against 11.7% in Q2FY24 on account of lower operating income during the quarter. The ratio for 9MFY24 was 15.0%. The provisions for the quarter stood at INR 2.4 Mn vs. NIL in Q2FY24. Profit after Tax (PAT) for Q3FY24 was INR 2,937 Mn, reporting a de-growth of 56.0% QoQ. Net profit for 9MFY24 stood at INR 12,939 Mn.
Outlook
We continue to assign a P/BV multiple of 2.0x with a Holdco discount of 20.0% to the value to arrive at a Target Price of INR 290 per share, an upside of 16.5% over CMP. Accordingly, we maintain our BUY rating on the shares of Jio Financial Services Ltd.
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