Jio Financial Services Ltd (NSE: JIOFIN) Q3 2025 Earnings Call dated Jan. 17, 2025
Corporate Participants:
Jill Deviprasad — Head of Investor Relations
Hitesh Kumar Sethia — Managing Director and Chief Executive Officer
Abhishek Pathak — Group Chief Financial Officer
Presentation:
Jill Deviprasad — Head of Investor Relations
Good evening, everyone. My name is Jill Deviprasad, and I’m the Head of Investor Relations for Jio Financial Services Limited. On the declaration of the results for the third quarter ended December 31, 2024 for FY ’24-’25, it gives me immense pleasure to welcome the analysts, investors, and our colleagues to this virtual meeting.
We have with us today our MD and CEO, Mr. Hitesh Sethia; and our Group Chief Financial Officer, Mr. Abhishek Pathak. [Operator Instructions] The earnings presentation is uploaded on our website, www.jfs.in, and on the stock exchanges.
Before I hand over the call, I would like to read out the safe harbor statement. This presentation contains forward-looking statements, which may be identified by their use of words like plans, expects, estimates, or other words of similar meaning. All statements that address expectations or predictions about the future, including, but not limited to, statements about strategy for growth, product development, market position, are forward statements based on rationale and data. Actual results may vary materially given market circumstances.
I will now hand over the call to Hitesh to discuss the business in detail.
Hitesh Kumar Sethia — Managing Director and Chief Executive Officer
Thank you, Jill, and good evening, everyone. A very warm welcome to all those joining this earnings call today. At the outset, I would like to wish all of you and your near and dear ones a very healthy, happy and a prosperous new year.
Today, we shall discuss our business performance for Q3 FY ’25 and nine months ended December 31, 2024, which reflects, in my view, strong operational execution. Our vision at JFSL is to simplify financial services by establishing ourselves as a trusted, digital-first financial companion for the people of India, catering to their diverse financial needs by leveraging next-gen technology. Our adjacency to an expansive customer base provides valuable insights which, combined with advanced data analytics, enables us to identify what customers want, when they want it, and how they want it. This integration of technology, customer intelligence and analytics empowers us to deliver tailored solutions while minimizing risks and maintaining the highest standards of governance and regulatory adherence.
In this slide, you can see a snapshot of the key operating highlights for the third quarter of FY ’25. I’m happy to share that with a diversified product suite, enhanced distribution, and a modular and scalable tech stack, we are firmly in an expansion mode. Having put the building blocks of the business in place, our focus is now squarely on operational execution with an unwavering determination to craft best-in-class digital journeys for our customers. Whether it is to buy digital gold, open a payment bank account, avail loan on mutual funds, purchase two-wheeler insurance, or onboard a small merchant for payment solutions, customers can complete their journey within a matter of minutes through a seamless and end-to-end digital process.
Simultaneously, we are also focusing on enhancing our distribution channels across the businesses. Jio Finance Limited, or JFL, which is our NBFC, now has nine offices across seven cities for last-mile fulfillment. Jio Payment Bank Limited has expanded its business correspondent network to around 7,300 BCs across the country. And Jio Payment Solutions Limited has embedded its payment solution with JioBharat, which allows us to onboard small merchants at scale commensurate to growing demand for affordable feature phones across the country. We have now entered into a marketing tie-up to leverage the MyJio app for customer acquisition.
The result of these strategic initiatives are beginning to reflect in our business performance. The assets under management of JFL stood at INR4,199 crores in Q3 FY ’25 compared to INR1,206 crores in the preceding quarter. The payment bank saw a robust 25% quarter-on-quarter increase in its customer base to 1.89 million CASA customers and all the digital properties of JFSL saw a combined monthly active user base of 7.4 million customers.
We have also taken concrete steps towards securing and applying for licenses necessary for scaling up our businesses further in the near future. A positive development in the last quarter was Jio Payment Solutions Limited receiving the online payment aggregator license, which will allow it to offer payment gateway services to merchants for online commerce.
On the asset management JV with BlackRock, after obtaining in-principle approval for its sponsors, JFSL and BlackRock, Jio BlackRock Asset Management Private Limited submitted an application to SEBI seeking final approval. And JioFinance Platform and Services Limited has also filed for a third-party application provider, or TPAP, license with NPCI for the JioFinance app.
Finally, a quick look at the financial performance. The consolidated profit after tax for Q3 FY ’25 stood at INR295 crores. Abhishek, our Group CFO, will talk you through the detailed financial performance of the company in the second half of this presentation.
Moving forward, the JioFinance app is our unified digital storefront for retail customers and a seamless, secure, and convenient platform for engaging with our financial products and services. During Q3 FY ’25, the combined average monthly active users across all the digital properties of JFSL, including the JioFinance app and our embedded offerings within the MyJio app, stood at 7.4 million users. Across the four core financial needs of a customer, which is borrow, transact, invest and protect, the JioFinance app features a diverse and growing bouquet of products and services with relevance across [Technical Issues]. On the auspicious occasion of Dhanteras, SmartGold, a convenient way of buying digital gold through safe, hassle-free and transparent process went live on the JioFinance app. Customers can now buy digital gold either in lump sum or through a systematic investment plan.
The app also saw the launch of MyMoney, a personal finance manager that allows customers to track and analyze their investments and expense. During the quarter, we accelerated our targeted marketing efforts by offering tailored products to relevant customers on the MyJio app, leveraging the wide customer funnel that MyJio offers. We also integrated exciting rewards with UPI and bill payments on our platform, which our customers received with much enthusiasm.
Turning to our lending and leasing vertical, through which we cater to both retail and corporate segments, offering a diverse range of products. JFL is focused on driving loan book growth through a combination of internal synergies and external partnerships, including with the larger Jio ecosystem. For instance, JFL’s home loan products are being distributed by the physical network of our group ecosystem as well as through collaborations with external property portals and real estate developers.
In the Loan Against Shares and Mutual Funds segment, JFL has established channel partnerships with wealth management firms and banks to serve high net worth individuals through a seamless phygital model. JFL is committed to empowering customers with quick and flexible access to loans backed primarily by either property or shares in mutual funds, thereby addressing the evolving financial needs of our customers.
On the payment front, our two verticals, the payment bank and payment solution company, have emerged as key layers for deep customer engagement as well as strategic levers for creating distribution strength by leveraging the group ecosystem. JPBL’s business correspondent network grew to about 7,300 BCs nationwide with new BCs added during the quarter. This expanded network enhances JPBL’s reach, particularly in rural areas, by supporting customers through an assisted digital channel.
JPSL also saw significant technology enhancements during the quarter. The business has upgraded to a new robust SaaS-based platform for payment services that will support a diversified distribution strategy. Small merchants can now be onboarded onto our payment solutions platform within five minutes by leveraging AI. A large part of our population still uses feature phones, and the integration with JioBharat will ensure that they don’t miss out on convenient payment solutions for their small businesses just because they don’t own a smartphone. For JPSL, this will translate into a much wider merchant base.
Jio Insurance Broking Limited, or JIBL’s product portfolio is now complete with a range of insurance plans available from 31 leading insurance companies across all categories and through its three primary distribution channels: Direct-to-Customer, Embedded & Ecosystem Sales, and Institutional Sales. During the quarter, JIBL expanded its offerings by launching non-term life insurance through Direct-to-Customer channel. Additionally, the number of plans available across auto, two-wheeler, health and life insurance categories more than doubled quarter-on-quarter to a total of 54 plans.
JIBL has also codeveloped and launched a range of sachet insurance products, including solar panel insurance and cyber insurance, to address specific customer needs under its embedded insurance channel. In the institutional channel, JIBL added 39 new corporate clients during the quarter and continued to witness sales momentum through a comprehensive suite of products spanning Group Term Life, Group Medical Cover, Group Personal Accident, and Commercial Insurance.
On our partnership with BlackRock for investment solutions, Jio BlackRock Asset Management Private Limited submitted its application for final regulatory approval in December of 2024. Concurrently, we are also in advanced stages of building the senior leadership and core business teams and are working to make the technology platform and infrastructure operational. Jio BlackRock Asset Management is building a platform that will enable us to simplify the investment landscape in India while ensuring operational excellence and efficiency. On the wealth management front, Jio BlackRock Investment Advisers Private Limited was formed in September 2024. Recruitment for the senior leadership of the wealth management company is currently underway.
In conclusion, Q3 FY ’25 has been a quarter of robust execution and progress across all our businesses. Our strong brand and ecosystem, a modern tech stack free of legacy, data analytics capabilities, cost levers, and a strong focus on governance gives us the right to win. Our aspiration is to become one of the leading companies in financial services, both in terms of meaningful market share as well as return ratios. And the journey towards this has begun well. Thank you.
And with that, I now invite Abhishek Pathak, our Group CFO, to provide a detailed overview of our financial performance for Q3 FY ’25. Over to you, Abhishek.
Abhishek Pathak — Group Chief Financial Officer
Thank you, Hitesh. Good evening, everyone. Let me take this opportunity to wish you all a wonderful new year and season’s greeting from all of us at JFSL. Q3 FY ’25 has been a quarter of robust operational execution with a significant increase in our NBFC loan book and the launch of new products through the JioFinance app, our direct-to-customer digital distribution channel.
In this context, we are pleased to share the financial highlights for the third quarter and nine months ended December 31, 2024. Our financial results for this period are prepared in compliance with Ind AS, as prescribed by the Ministry of Corporate Affairs.
This slide highlights our group structure. JFSL is a holding company, which operates its financial services businesses through its customer-facing subsidiaries, JVs, and associates. With a prudent risk management framework and strong governance structures in place, these entities are supported by multilayered products and business teams.
During the quarter, Jio BlackRock Asset Management Private Limited was incorporated as a 50-50 JV, following JFSL and BlackRock receiving in-principle approval in September 2024 to sponsor a mutual fund. JFSL and BlackRock have made an initial investment of INR82.5 crores each in this entity. Jio BlackRock Asset Management has filed for final approval with the regulator in December 2024. In addition, JFSL and BlackRock also made an initial investment of INR3 crores each in Jio BlackRock Investment Advisers Private Limited, another 50-50 JV for wealth management incorporated in September 2024.
Moving on to the financial performance now. JFSL’s consolidated total income for the quarter was INR449 crore versus INR414 crore in Q3 FY ’24 and INR694 crore in Q2 FY ’25. Sequentially, total income declined as total income in Q2 FY ’25 included a dividend of INR241 crore received on the shares of Reliance Industries Limited, held by Reliance Industrial Investments and Holdings Limited, or RIIHL, which is an investment holding company and a wholly-owned subsidiary of JFSL.
The consolidated total income for Q3 FY ’25 comprised the following: interest income of INR210 crores, which includes interest earned on our loan book and income from our treasury operations; net gain on fair value changes on money market and liquid mutual funds of INR191 crores; and fees and commission income of INR37 crores on account of fees received by the insurance broking and the payment services businesses.
With respect to our treasury operations, I would like to highlight that our prudent cash management helped us navigate a challenging market environment. The company’s total expenses, including provisions, for Q3 FY ’25 was INR131 crore as compared to INR98 crores in Q3 FY ’24 and INR146 crores in Q2 FY ’25. Provisions on account of ECL increased to INR12 crores in Q3 FY ’25 from INR4 crores in Q2 FY ’25. Excluding provisions, total expenses declined on a quarterly basis. This was on account of annual CSR expense incurred in Q2 FY ’25 and pre-incorporation expenses attributable to new businesses in subsidiaries and JVs.
Shares of associates and joint ventures stood at INR59 crores in Q3 FY ’25 versus INR66 crores in Q3 FY ’24 and INR225 crores in Q2 FY ’25. It may be noted that in Q2 FY ’25, Reliance Services and Holdings Limited, or RSHL, received dividend on its investment in RIL shares. RSHL is accounted for an associated of JFSL. Consolidated profit after tax in Q3 FY ’25 stood at INR295 crores versus INR294 crores in Q3 FY ’24 and INR689 crores in Q2 FY ’25. On a year-on-year basis, increase in total income was offset by higher expenses, including provisions, and lower share of associates and joint ventures.
Now moving on to our standalone financial performance. Standalone total income in Q3 FY ’25 was INR148 crore versus INR134 crores in Q3 FY ’24 and INR383 crores in Q2 FY ’25. It is to be noted that in Q2 FY ’25, JFSL received dividend income of INR235 crores from RIIHL. Total expenses, including provisions, for Q3 FY’25 on a standalone basis was INR48 crores as compared to INR36 crores in Q3 FY ’24 and INR55 crores in Q2 FY ’25. The sequential decline in expenses was mainly due to CSR expense incurred in Q2 FY ’25. On a standalone basis, the profit after tax of the company for Q3 FY ’25 was INR75 crore versus INR71 crores in Q3 FY ’24 and INR305 crores in Q2 FY ’25.
In conclusion, I would like to reiterate that we will continue to focus on our cost levers and aim to maintain best-in-class cost-to-income ratio, driving benefits for all our stakeholders. Thank you for your continued support as we pursue a sustainable path to value creation within the guardrails of our four guiding principles.
With this, I would like to hand over the call to Jill. Thank you so much for your time.
Jill Deviprasad — Head of Investor Relations
Thank you, Hitesh and Abhishek, and thank you, everyone, for joining this call. As we conclude our earnings call, we invite you to explore the detailed earnings presentation available on our website and the stock exchanges. Have a good one. Thank you.