JMFINANCIL - JM Financial Limited Share Price

Management provided a positive outlook for JM Financial Limited, emphasizing robust growth across various business segments. Key highlights include an operating PAT of INR 270 crores for Q2 FY26, with a year-on-year increase of 16%. The projected growth in transaction activity reflects a strong deal pipeline of nearly INR 120,000 crores in IPOs, with expected execution over the next 6 to 12 months.

The Wealth Management segment has expanded significantly, with a staggering 43% increase in sales and relationship managers year-on-year, contributing to a recurring AUM growth of 26% to INR 32,000 crores. The average AUM from non-liquid assets has also grown by 36% year-on-year, reaching approximately INR 12,100 crores. Moreover, the SIP book has surged 59% year-on-year to INR 115 crores per month.

In the Affordable Housing segment, the AUM has reached INR 3,031 crores, indicating a year-on-year growth of 28%. The management is strategically placed to sustain long-term growth, stating that they aim for a strong recovery in their private markets business, predicting a book growth of 20% comfortably.

On profitability, management highlighted a commitment to mitigating operating expenses while focusing on strategic investments in growth areas. They anticipate the Asset Management division to achieve breakeven within the next couple of years, driven by an increase in AUM through new fund strategies.

Importantly, the company declared an interim dividend of INR 1.5 per share as part of its shareholder distribution strategy, reflecting confidence in financial stability and profitability moving forward.

Here are the major questions and detailed answers from the Q&A section of the earnings transcript for JM Financial Limited's conference call held on November 7, 2025:

Q1: "How do we track the Wealth Management business going ahead? Have we made most of the opex flowing through the P&L or do we have more opex to come? Can we see this recurring AUM growing at a faster clip?"

A1: "We will continue to invest because our profits decreased due to lower income from transactional and pre-IPO deals. We've almost broken even in the Wealth Management business, and we're targeting a steady growth with a focus on increasing recurring AUM. Expect ongoing enhancements as we expand our talent pool and capture market opportunities."

Q2: "Can you highlight plans for launching new AIF or private equity-based funds to bolster recurring AUM growth?"

A2: "We are actively pursuing a pre-IPO fund due to our leading position in ECM. Regulatory approvals are pending, and we're also eyeing a PE fund and a real estate credit fund soon. The upcoming pre-IPO fund launch will significantly add to our AUM, underpinned by our robust strategy and team capabilities."

Q3: "Could you summarize your recent asset rundown in the private markets and whether any remain toxic?"

A3: "All the assets currently are from the post-COVID era. We're seeing good recoveries, and I can confidently say that we don't have sticky assets remaining. The real estate loan book has reduced from INR 10,000 crores to under INR 2,000 crores, with no anticipated surprises in the recovery landscape."

Q4: "What are the expectations for credit costs and asset quality trends over the next few quarters?"

A4: "Our focus remains on continual balance sheet strengthening rather than mere repair. The credit portfolio, largely secured, enjoys 84% provision, ensuring a solid recovery trajectory. The goal is to transition towards cash flow-backed lending with improved standards of credit risk management."

Q5: "What insights can you provide regarding the profitability issues in the Asset Management sector?"

A5: "We are still in the buildup phase, increasing our workforce while venturing into larger premises. Although currently unprofitable, we expect to reach breakeven within the next couple of years as our AUM grows and new AIF strategies take off."

Q6: "In the Wealth Management business, what is the current impact of digital investments on profits?"

A6: "Currently, our reported profits from Wealth Management reflect losses from digital investments. Excluding these, profits would have exceeded INR 90 crores in the first half. We aim to reduce these losses and work towards breakeven by FY '27 as we recalibrate our strategy."

Q7: "Looking ahead, what is your projection for AUM in the Asset Management business?"

A7: "While it is tough to specify a target, I would be disheartened if our AUM does not double in the next 2-3 years. The integration of various strategies in our platform will significantly contribute to this growth."

Q8: "What is the timeline and aim for the IPO of our housing finance business?"

A8: "We are looking at an IPO for the housing finance division in FY '28 after completing 10 years of operational history, which will allow us to leverage our established performance."

These responses summarize the major themes from the Q&A session while maintaining the content's richness and relevance to investors.