Jio Financial Q3 Results: Profit Falls 20.6% As Other Operating Expenses Rise

Jio Financial Services Ltd.'s profit declined in the third quarter.

The company's standalone bottom-line fell 20.6% quarter-on-quarter to Rs 70.48 crore in the quarter ended December, according to an exchange filing on Monday.

The decline in profit was largely due to higher other operating expenses, which rose 69.2% sequentially to Rs 22 crore. The staff expenses increased 16.6% quarter-on-quarter to Rs 14 crore.

On a consolidated basis, the company's net profit fell 56% to Rs 293.8 crore quarter-on-quarter, from Rs 668.1 crore.

This fall was on account of no dividend income in the quarter ended December.

In Q2, the lender's consolidated net profit rose, supported by Rs 216.85 crore worth of dividend income. In addition, Rs 154 crore worth of dividend income came through associates in the previous quarter.

The standalone total income, too, declined 10% quarter-on-quarter to Rs 134.08 crore. On a consolidated basis, it fell 31,9% sequentially.

Share of associates and joint ventures, net of tax, fell 69.7% quarter-on-quarter to Rs 66 crore.

Jio Financial plans to launch the leasing business under Jio Information Aggregator Services Ltd., along with supply chain financing, according to the Q3 FY24 investor presentation. The latter would address the working capital needs of suppliers.

This comes after Jio Financial announced new business ventures in the quarter ended September. These were under the lending, insurance broking, payments bank and payment solutions businesses.

Under the payments bank business, the company has initiated the soft launch of a debit card and re-platformed to launch digital savings bank account.

The company has launched an app for merchants under its payment solutions business. It has also launched the pilot of Jio Voice box and enabled Jio Bharat phones with UPI 123.

Among other products, it plans to introduce a loan against securities and home loans.

Given the current market and regulatory developments, it also plans to increase focus on secured lending.

"...large opportunity in the secured lending space," the investor presentation said.

In Q2 FY24, when the company announced its lending business, it had its focus on personal loans for salaried and self-employed individuals in the MyJio app in Mumbai. It has also launched a consumer durables loan across 300 stores in India.

For unsecured lending and consumer durable products, the company has capability as well.

However, with a "noticeable market reaction vis-à-vis unsecured lending", the company has decided to take a calibrated approach in this space and shifted its focus towards secured lending.

"...Accelerated focus on secured lending, including leasing as a product," it said in its investor presentation.

Jio Financial has also announced the appointment of senior management personnel with effect from Jan. 15, according to the exchange notice.

It appointed Rupali Adhikari Sawant as the Group Head of Internal Audit. Before JFS, she was associated with BSR and Co. as an associate partner for risk advisory, governance risk and compliance services.

The lender has also appointed Sudheer Reddy Govula as Group Chief Compliance Officer for a period of four years. His last association was with Bandhan Bank Ltd. as the Chief Compliance Officer.