Jio Financial Services lending and AMC scale-up underpin long-term growth outlook
JIO Financial Services Ltd.
Buy
₹219
₹213.7
₹300
36.99%
Investment View and Valuation
In its October 15, 2026 results update on Jio Financial Services, Motilal Oswal Financial Services reiterated its Buy rating and Rs 300 target price. The broker views 2QFY27 as another quarter of strong operational execution across Jio Financial Services’ full-stack financial services ecosystem.
The positive view is based on disciplined Jio Credit loan-book expansion, rapid scaling of asset management under the BlackRock joint ventures, steady payments growth, a strong capital base and wider digital customer engagement. Partnerships with Bank of America in lending, BlackRock in investments and Allianz Group in insurance are seen as adding global expertise and institutional capabilities.
2QFY27 Financial Performance
Jio Financial Services reported strong growth in net interest income, although higher operating expenses, increased credit costs and losses from joint ventures and associates resulted in misses at the pre-tax and post-tax levels.
| Metric | 2QFY27 | Change / Variance |
|---|---|---|
| Net interest income | Rs 680 crore | Up about 165% year on year; around 18% above Motilal Oswal’s estimate |
| Other income | Rs 440 crore | Down about 28% year on year |
| Investment income | About Rs 160 crore | Compared with Rs 180 crore in the prior year |
| Operating expenditure | Rs 550 crore | Up about 91% year on year; 14% above the broker’s estimate |
| Employee costs | Rs 150 crore | Up about 55% year on year |
| Consolidated pre-provision operating profit, excluding dividend income | Rs 570 crore | Up 85% year on year |
| Credit costs | Rs 40.8 crore | Up from Rs 24.6 crore in 1QFY27 |
| Consolidated profit before tax, excluding dividend income | Rs 490 crore | Up 51% year on year; around 21% below the broker’s estimate |
| Consolidated profit after tax | Around Rs 340 crore | Down about 51% year on year; around 27% below the broker’s estimate |
The decline in consolidated profit after tax partly reflected a Rs 43.9 crore share of loss from joint ventures and associates.
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Jio Credit: Loan-Book Expansion
Jio Credit’s assets under management rose about 22% quarter on quarter to around Rs 37,300 crore as of September 2026. Disbursements increased about 98% year on year and 17% quarter on quarter to Rs 13,100 crore.
Net interest income was Rs 300 crore, up about 115% year on year, while profit after tax was Rs 120 crore, up about 140% year on year and 25% quarter on quarter. Average borrowing cost was broadly stable at 7.08%.
Management emphasised disciplined underwriting, calibrated risk-taking and a fully secured loan book. The proposed Bank of America investment, under which it may acquire up to around 49.9% of Jio Credit, is expected to add capital for growth.
Expansion Across the Financial Services Ecosystem
| Business | 2QFY27 / September 2026 Update |
|---|---|
| JioBlackRock AMC | Assets under management reached Rs 22,700 crore versus Rs 18,400 crore in June 2026. The platform had over 800 institutional and 12 lakh individual investors. |
| Specialised investment fund platform | Reached Rs 480 crore within three months. |
| Jio Payments Bank | Around 40 lakh CASA customers, deposits of Rs 640 crore and a business correspondent network of about 6.33 lakh. |
| Jio Payment Solutions | Processed Rs 14,700 crore of transactions, down 24% quarter on quarter. Net processing margin improved to 14 basis points from 12 basis points. |
| Jio Insurance Broking | Facilitated premiums of Rs 350 crore. |
Outlook, Estimates and Valuation
Management expects continued ecosystem growth through lending, investments, payments and protection, while investing in technology, products and emerging verticals.
Motilal Oswal cut FY27 earnings per share by around 6.6% because of higher provisions but raised FY28 earnings per share on better net interest income. It forecasts consolidated profit after tax CAGR of 54% over FY26 to FY28 and expects Jio Credit assets under management and profit after tax CAGRs of 89% and 190%, respectively.
The stock trades at 0.9 times FY27 estimated price to book value. The Rs 300 target price is based on a September 2028 sum-of-the-parts valuation, including the Reliance Industries stake and cash investments. The broker’s sum-of-the-parts valuation does not assign value to some incubating businesses, including insurance manufacturing, wealth management, broking and marketplace.
Key Watch Items and Risks
- Higher credit provisions.
- Loan-book risk as Jio Credit scales.
- Continued losses from associates and joint ventures.
- Payments transaction volumes.
- Evolving insurance-sector regulation.
Disclaimer: This is a summary of a research report published by the broker/research house identified above. The views, recommendations, target prices and estimates are those of the respective broker and do not represent DSIJ investment advice. The summary may be AI-assisted, hence please refer to the original report for complete details, disclosures and risks.
