Jio Financial Services shares dip 3% on tepid Q1 results; should you buy?

Shares of Jio Financial Services fell nearly 3 per cent on Tuesday, hitting a low of ₹346.80, following a 6 per cent year-on-year decline in net profit for the quarter ending June 2024.

The net profit for Q1FY25 was ₹313 crore, compared to ₹332 crore in the same period of the previous financial year.

In the reported quarter, total revenue from operations amounted to ₹418 crore, marking a 0.9 per cent increase from ₹414 crore in the same period last year. Meanwhile, interest income for the quarter stood at ₹162 crore, down from ₹281 crore in Q4FY24 and ₹202 crore in Q1FY24.

On a standalone basis, PAT for the quarter was ₹72 crore, compared to ₹78 crore in the January-March quarter and ₹145 crore in the corresponding period last year. Total standalone revenue from operations was ₹134 crore in the reported quarter, down from ₹141 crore in Q4FY24 and ₹215 crore in Q1FY24.

On a sequential basis, the profit after tax (PAT) for the quarter reported a slight increase of 0.64 per cent, reaching ₹311 crore.

Meanwhile, revenue experienced a minor decline compared to the ₹418 crore reported in the January-March quarter.

Regarding its business developments, Jio Financial Services partnered with 31 insurance companies and introduced digital auto and two-wheeler insurance on the JioFinance app. Additionally, it launched Metro Cash & Carry for shopkeeper insurance and saw growth in its institutional channel sales.

Since its listing on the exchanges on August 21, 2023, the stock has surged over 40 per cent, while year-to-date, Jio Financial shares have increased by 48 per cent.

Opportunity to buy?

Brokerage firm Angel One's Osho Krishan, Senior Research Analyst - Technical & Derivatives, said, “The stock has seen a decent correction from its lifetime high of ₹395. The broader structure remains buoyant as it recouped some of its lost grounds. The ₹335 zone is likely to cushion any blip, while a further correction could attract fresh shorts in the counter towards the 310-300 range on an immediate basis. On the higher end, ₹370 is likely to act as a resistance, and a decisive breakthrough could only bring the mojo back to the counter.”