JM Financial has made gross provisions of Rs.175 Crore to deal with the uncertainties on account of COVID-19.
Mumbai, May 06, 2020: The Board of Directors of JM Financial Limited, at its meeting held today, approved the audited financial results for the fourth quarter and year ended March 31, 2020.
The Board of Directors have recommended a dividend of Re. 0.20 per share of the face value of Re.1/- each. The lower dividend is on account of uncertainties of COVID-19.
Summary of Consolidated results FY 20 – Q4 compared to FY 19 – Q4
(Rs. in Cr)
Particulars | Quarter ended March 31, 2020 | Quarter ended March 31, 2019 | % Increase / (Decrease) |
|---|---|---|---|
Total income | 840.58 | 792.11 | 6.12% |
Profit before tax | 215.02 | 244.84 | (12.18%) |
Net profit after tax and before non-controlling interest | 162.96 | 176.45 | (7.64%) |
Net profit after tax, non-controlling interest and share of associates | 130.56 | 128.64 | 1.49% |
Adjusted Net Profit after tax, non-controlling interest and share of associates (on account of COVID 19) 1 | 206.66 | 128.64 | 60.65% |
Summary of Consolidated results FY 20 compared to FY 19
(Rs. in Cr)
Particulars | Year ended March 31, 2020 | Year ended March 31, 2019 | % Increase / (Decrease) |
|---|---|---|---|
Total income | 3,453.55 | 3,499.49 | (1.31%) |
Profit before tax | 1,093.52 | 1,282.79 | (14.75%) |
Net profit after tax and before non-controlling interest | 777.95 | 837.05 | (7.06%) |
Net profit after tax, non-controlling interest and share of associates | 544.98 | 572.18 | (4.75%) |
Adjusted Net Profit after tax, non-controlling interest and share of associates (on account of COVID 19)1 | 621.08 | 572.18 | 8.55% |
The earnings per share for the year ended March 31, 2020 is Rs. 6.48. The consolidated net worth* as at March 31, 2020 stands at Rs. 5,586 Cr and the gross debt equity (equity + non-controlling interest of Rs. 2,407 Cr) ratio is 1.47 times* and net debt equity of 1.04 times* (post reducing cash and cash equivalents of Rs. 3,412 Cr). The book value per share is Rs. 66.41. Our total loan book stood at Rs. 11,531 crore as of March 31, 2020 compared to Rs. 14,107 crore as of March 31, 2019. Gross NPA and Net NPA stood at 1.65% and 1.13% respectively as of March 31, 2020 compared to 0.68% and 0.55% respectively as of March 31, 2019.
* Computed after reducing goodwill of Rs.52.44 Cr from shareholder’s funds
For the quarter, the financial results have been prepared taking into estimation the impact of COVID-19. The major impact of COVID-19 in the financial statements is captured in expected credit loss and fair value of investments. The Group has taken gross provisions (including fair value loss) of Rs.175 crore on account of COVID-19.
Commenting on the results and financial performance, Mr. Vishal Kampani, Managing Director, JM Financial Group, said,
“The last 18 months have been challenging for the financial services and especially for the NBFC sector due to the stressed credit environment and slow economic growth. The situation has further worsened on account of the COVID-19 pandemic and subsequent lockdowns across the country. We have made gross provisions of Rs.175 crore on our balance sheet on account of the uncertainties around the impact of COVID-19.
We have been able to demonstrate resilience by keeping strong liquidity buffers and healthy leverage ratios. The cash and cash equivalent as on March 31, 2020 stood at Rs. 3,412 Crore and our net debt-equity ratio stands at 1.04x which is amongst the lowest in financial services space.
We continue to closely monitor the external environment and will remain prudent in our business planning over the next few quarters as the impact of the pandemic is uncertain. We are focused on building strong resilience so that we can keep moving, ahead of the downturn.
During these unprecedented crisis, JM Financial Group has committed Rs. 30 Crore towards COVID-19 relief measures. The group stands together with the country to combat this crisis and with a collaborative approach, we will be able to overcome the pandemic.”
Business Update
During the quarter, some of our completed investment banking transactions were as follows:
The AUM/AUA of our wealth management business stood at Rs. 44,883 Cr (excluding custody assets) as on March 31, 2020 as compared to Rs. 41,886 Cr as on March 31, 2019 and Rs. 46,886 Cr as on December 31, 2019.
During the quarter, the average daily trading volume stood at Rs. 13,894 Cr.
During the quarter, in IPO financing business, we funded 2 public issues (including 1 ETF issue) wherein the aggregate amount of funding was around Rs. 8,733 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. 7,651 Cr as March 31, 2020. Our wholesale mortgage lending focuses on Tier - 1 cities, viz., Mumbai, Thane, Pune, Bangalore, Chennai, Hyderabad, Kolkata and NCR. After investing in the right talent, technology and processes, our retail mortgage lending business is all set to build its niche and achieve scale. During the quarter, our retail mortgage lending announced the co-lending arrangement with Bank of Baroda to further boost the momentum.
The highlights of the last 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 been impacted due to the lockdown. Post the lockdown is lifted the sector will have to deal with issues of limited labour, low demand and lack of credit availability. 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 provide financial closures for ongoing projects.
During the quarter, we concluded 1 transaction by way of resolution plan being implemented in NCLT. Till March 31, 2020, we have acquired total outstanding dues of Rs. 60,363 Cr at a gross consideration of Rs. 17,069 Cr. Resolution strategies were initiated for majority of the assets acquired. Security Receipts worth ~Rs. 124 Cr were redeemed during the quarter. The outstanding Security Receipts stood at Rs. 11,489 Cr as on March 31, 2020 as compared to Rs. 11,413 Cr as on December 31, 2019. The contribution of JM Financial Asset Reconstruction Company Limited stood at Rs. 3,012 Cr as on March 31, 2020 and Rs. 2,946 Cr as on December 31, 2019.
This year the focus was more on resolution and few critical accounts were resolved through settlement and Corporate Insolvency Resolution Process (CIRP) however during the last quarter of FY 20, 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.
In addition, the lockdown has led to weaker global demand, supply chain disruptions, lower commodity prices, reduced discretionary spends, factory shutdowns and travel restrictions. The impact of the virus on the global sentiment, economic and otherwise has been immense. While COVID-19 may not have a direct impact, the evolving global and domestic economic slowdown will impact demand and realisations. The cash flows of our business depends on the cash flows of companies which we have lent to and hence these could be impacted basis the sector exposure.
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). The average AUM of our Mutual Fund schemes during the quarter ended December 31, 2019 stood at Rs. 5,683 Cr; comprising of Rs. 4,143 Cr in equity schemes (including hybrid schemes) and Rs. 1,540 Cr in debt schemes (including liquid scheme).
Borrowing Profile
Our long term borrowing as a proportion of total borrowing stood at approximately 91% as on March 31, 2020.
Awards & Recognitions
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The press release and audited 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 includes the mutual fund business.
As of March 31, 2020, the consolidated loan book stood at ~Rs. 115.3 BN, distressed credit business AUM at ~Rs. 114.9 BN, wealth management AUM at ~Rs. 448.8 BN, mutual fund AAUM at ~Rs. 61.1 BN.
The Group is headquartered in Mumbai and has a presence across 424 locations spread across 144 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.