JFSL Share Price: Investors Express Cautious Sentiment Post Strong Q2 Earnings

Jio Financial Services (JFSL) witnessed a remarkable 101% surge in net profit during the second quarter of the current financial year compared to the previous quarter. Despite the great performance, it didn't excite investors, as result, stock dropped by 1.7% on Tuesday.

In its first quarterly results since its stock market debut in August, JFSL reported a net profit of Rs 668 crore for the mentioned quarter. Despite this impressive figure, the stock closed at Rs 221, reflecting a 1.7% dip from Monday’s closing, and slid nearly 2% in intra-day trade.

JFSL's market capitalization also witnessed a decline, falling by Rs 2,414 crore to Rs 1.40 trillion during the session. Market experts attribute this cautious investor sentiment to Jio Fin's delay in commencing its core operations, putting the market in a wait-and-watch mode.

Deven Choksey, founder of KRChoksey group, stated, “The growth was largely from financial operations. The company is expanding its network and has significant plans in its pipeline, but it could take six months before we start seeing results.”

During the eventful quarter, the net profit of JFSL outshone the total income of the company. Sequentially, the revenue witnessed a substantial 48% surge to Rs 608 crore, with dividend income contributing Rs 217 crore.

This robust earnings growth can be attributed primarily to the dividend income of Rs 217 crore received through JFSL's 6.1% stake in Reliance Industries. Sonal Gandhi, a research analyst at Centrum Equity Research, highlighted JFSL's strong brand equity and emphasized the company's favorable position.

JFSL is trading at 3.1x P/BV (price to book value), considering a 20% discount to its stake in RIL. The tie-up with BlackRock and the impending launch of the mutual fund business are expected to boost investor confidence once the business takes off.

Looking at the technical aspect, Vaishali Parekh, Vice President (Technical Research) at Prabhudas Lilladher, highlighted the importance of surpassing the near-term resistance zone of 235 for a positive trend, potentially leading to further rise up to 246-levels.

In conclusion, while JFSL showcased impressive Q2 earnings, market dynamics and investors’ cautious approach have influenced the stock's recent performance. However, market observers remain optimistic about JFSL's future prospects, especially with its strategic ventures and expansion plans. Investors are advised to closely monitor the stock's movements and industry developments.

Disclaimer: The views & investment tips expressed by investment experts on youblog.live are their own and not those of the website or its management. Youblog.live advises users to check with certified experts before making any investment decisions.