Mr. P S Jayakumar, a veteran in financial services, has been appointed by the Board as an Independent Director effective July 30, 2020
Mumbai, July 30, 2020: The Board of Directors of JM Financial Limited, at its meeting held today, approved the unaudited financial results for the first quarter ended June 30, 2020.
Summary of Consolidated results FY 21 – Q1 compared to FY 20 – Q1
(Rs. in Cr)
Particulars | Quarter ended June 30, 2020 | Quarter ended June 30, 2019 | % Increase / (Decrease) |
|---|---|---|---|
Total income | 691.11 | 856.57 | (19.32%) |
Profit before tax | 184.17 | 302.37 | (39.09%) |
Net profit after tax and before non-controlling interest | 139.61 | 195.03 | (28.42%) |
Net profit after tax, non-controlling interest and share of associate | 93.61 | 127.29 | (26.46%) |
Adjusted Net Profit after tax, non-controlling interest and share of associate (on account of COVID-19) 1 | 121.36 | 127.29 | (4.66%) |
The earnings per share for the quarter ended June 30, 2020 is Rs. 1.01. The consolidated net worth* as at June 30, 2020 stands at Rs. 6,445 Cr and the gross debt equity (equity + non-controlling interest of Rs. 2,453 Cr) ratio is 1.17 times* and net debt equity of 0.79 times* (post reducing cash and cash equivalents of Rs. 3,394 Cr). The book value per share is Rs. 67.71. Our total loan book** stood at Rs. 10,833 crore as of June 30, 2020 compared to Rs. 13,926 crore as of June 30, 2019. Gross NPA and Net NPA stood at 1.80% and 1.22% respectively as of June 30, 2020 compared to 0.90% and 0.80% respectively as of June 30, 2019. We have made additional gross provisions of Rs. 66 Cr# on account of the uncertainties around COVID-19 for the quarter ended June 30, 2020, thereby taking the total provisions to Rs. 241 Cr# on account of the pandemic.
* Computed after reducing goodwill of Rs.52.44 Cr from shareholder’s funds and excludes borrowings for episodic financing
**Loan book does not include episodic financing book
# unaudited and based on management estimates
Commenting on the results and financial performance, Mr. Vishal Kampani, Managing Director, JM Financial Group, said,
“The headwinds due to the COVID-19 induced economic disruptions continue to impact the group’s businesses. During these challenging times, we are maintaining liquidity buffers and healthy leverage ratios. The cash and cash equivalent as on June 30, 2020 stood at Rs. 3,394 Crore and our net debt-equity ratio stands at 0.79x. In June 2020, we successfully concluded our QIP issue of Rs. 770 Crore which further helped strengthen our balance sheet amid the COVID-19 uncertainties. We are intensifying our efforts to steer our businesses through these uncertain times to ensure we continue to serve our clients in the best possible way”
Commenting on the appointment of Mr. P S Jayakumar on the Board of the Company, Mr. Vishal Kampani said,
“The Company has further strengthened its board by inducting Mr. Jayakumar as an independent director and we welcome Mr. Jayakumar to the board of JM Financial Limited.”
Business Update
During the quarter, some of our completed investment banking transactions were as follows:
The AUA of our wealth management business stood at Rs. 47,579 Cr (excluding custody assets) as on June 30, 2020 as compared to Rs. 43,038 Cr as on June 30, 2019 and Rs. 44,883 Cr as on March 31, 2020.
During the quarter, the average daily trading volume stood at Rs. 11,175 Cr.
The total mortgage lending book* (comprising of loan book of JM Financial Credit Solutions Limited and JM Financial Home Loans Limited) stood at Rs. 7,428 Cr as at June 30, 2020. Our wholesale mortgage lending focuses on Tier - 1 cities, viz., Mumbai, Thane, Pune, Bangalore, Chennai, Hyderabad, Kolkata and NCR.
*excluding episodic financing book
The highlights of the quarter in respect of the wholesale mortgage lending are as under:
We continue to be in a challenging environment accelerated by the COVID-19 crisis and the lockdown that has been initiated since mid-March 2020. We believe the residential sales will continue to be under pressure due to uncertainty among prospective buyers about the economy and the path to recovery. Commercial real estate and retail sectors will also be impacted due to the lockdown. Most geographies have witnessed commencement of construction activities albeit at a slow pace. After the easing of the lockdown we had witnessed increase in footfalls to sites by prospective buyers. However repeated lockdowns in some geographies has slowed down that process again significantly. The sites continue to struggle with limited availability of labour and lack of movement of material.
We continue to believe that completed projects will sell faster as there will still be end user demand looking for value deals. New launches and acquisitions will be deferred thus reducing the gap between the supply and demand situations. There have been some positive actions by the RBI and RERA to provide some relief to the struggling sector.
Having said that, these conditions will continue to affect the liquidity in the sector as credit availability will be limited. The current scenario will expedite the consolidation in the sector which would lead to larger players acquiring more market share. We will witness reduction of interest rates for home loans which coupled with attractive prices might lead to end user demand coming back to the residential space. However, the next six to twelve months continue to be uncertain in light of the current lockdown situation and uncertainty about the COVID-19 crisis.
We would remain cautious in our underwriting of new transactions and would continue to support our existing clients to complete their respective ongoing projects.
Until June 30, 2020, we have acquired total outstanding dues of Rs. 60,363 Cr at a gross consideration of Rs. 17,069 Cr. Security Receipts worth ~Rs. 48 Cr were redeemed during the quarter. The outstanding Security Receipts stood at Rs. 11,441 Cr as on June 30, 2020 as compared to Rs. 11,489 Cr as on March 31, 2020. The contribution of JM Financial Asset Reconstruction Company Limited stood at Rs. 2,982 Cr as on June 30, 2020 as compared to Rs. 3,012 Cr as on March 31, 2020. This quarter, the focus was on recoveries however the COVID-19 pandemic has cast a shadow over the recoveries. The lock down has also impacted the NCLT processes and consequently our recoveries have been delayed further. The delays in recoveries have increased the carrying costs of the assets under resolution and thereby impacting the returns from these assets.
The average AUM of our Mutual Fund schemes during the quarter ended June 30, 2020 stood at Rs. 4,049 Cr; comprising of Rs. 964 Cr in equity schemes (including hybrid schemes) and Rs. 3,085 Cr in debt schemes (including liquid scheme). The average AUM of our Mutual Fund schemes during the quarter ended March 31, 2020 stood at Rs. 6,109 Cr; comprising of Rs. 3,285 Cr in equity schemes (including hybrid schemes) and Rs. 2,824 Cr in debt schemes (including liquid scheme).
JM Financial Credit Alternatives, our credit alternatives arm, completed first close of its maiden “JM Financial Yield Enhancer (Distressed Opportunity) Fund I” with commitments aggregating Rs. 159 Crore from HNIs, family offices and institutions.
Borrowing Profile
We continued our focus on diversifying our sources and maturities for our borrowing profile. As on Jun 30, 2020 our long term borrowing as a proportion of total borrowing* stood at approximately 90%. Borrowing through Commercial paper (CP) consisted approximately 6% of the total borrowing* as on Jun 30, 2020. These CP’s were utilised mainly towards the short term liquid assets.
* excludes borrowings for episodic financing
Awards & Recognitions
-ends-
The press release and unaudited financial results are available on our website www.jmfl.com
About JM Financial
JM Financial is an integrated and diversified financial services group. The Group’s primary businesses include (a) Investment banking, wealth management and securities business (IWS) which includes fee and fund based activities for its clients (b) Mortgage Lending which includes both wholesale mortgage lending and retail mortgage lending (home loans, education institutions lending and LAP) (c) Distressed credit which includes the Asset Reconstruction business (d) Asset Management which includes the mutual fund business.
As of June 30, 2020, the consolidated loan book stood at ~Rs. 108.3 BN, distressed credit business AUM at ~Rs. 114.4 BN, wealth management AUA at ~Rs. 475.8 BN, mutual fund AAUM at ~Rs. 40.5 BN.
The Group is headquartered in Mumbai and has a presence across 456 locations spread across 154 cities in India. The equity shares of JM Financial Limited are listed in India on the BSE and NSE.
For more information, log on to www.jmfl.com or contact:
Manali Pilankar Corporate Communications Tel.: +91 22 6630 3475 Email: manali.pilankar@jmfl.com Nishit Shah and CFO – JM Financial Products Limited | Manish Sheth Group Chief Financial Officer Tel.: +91 22 6630 3460 Email: manish.sheth@jmfl.com
Gagan Kothari CFO – JM Financial Credit Solutions Limited Tel.: +91 22 6630 3360 Email: gagan.kothari@jmfl.com |
Forward - Looking statements
This press release (‘document’) containing JM Financial Group’s activities, projections and expectations for the future, may contain certain forward-looking statements based upon the information currently available with the Company or any of its subsidiaries and associate companies. The financial results in future may vary from the forward-looking statements contained in this document due to uncertainties and unforeseen events that may impact the businesses of the JM Financial Group. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.
This document is for information purposes only and any action taken by any person on the basis of the information contained herein is that person’s responsibility alone and neither JM Financial Group nor any of their directors or employees will be liable in any manner for the consequences of such actions.