Jio Financial Q1 profit jumps 155% as lending revenue soars
Jio Financial Services reported a 155% surge in first-quarter profit driven by rapid expansion in its lending and investing arms, though rising costs to build out new joint ventures with BlackRock and Allianz are weighing on analyst earnings estimates.
Shares of Jio Financial Services rose 6% to ₹250 on Friday after the company posted consolidated net profit of ₹830 crore for the June quarter, up 155% from ₹325 crore a year earlier. Revenue from operations more than tripled, climbing 227% year-on-year to ₹2,004 crore.
The top-line surge was driven by aggressive expansion across both lending and investing segments. Lending revenue grew 177% to ₹698 crore, while the investing business generated ₹982 crore, a 190% increase. Fee and commission income also surged to ₹325 crore from ₹54 crore, reflecting early traction in wealth management and payments as the company diversifies beyond traditional interest income.
The divergence between revenue and bottom-line growth highlights the cost of Jio Financial's ambitious expansion. Pre-provision operating profit rose a more modest 38% to ₹505 crore. Motilal Oswal noted that operating expenses remained elevated as the firm scales existing operations and incubates new ventures. To factor in these sustained investments, the brokerage cut its FY27 and FY28 earnings per share estimates by 4% and 6%, respectively.
Management is prioritizing long-term market share over near-term margins. The company's lending arm, Jio Credit, saw its assets under management cross ₹300 billion. Looking ahead, Managing Director and CEO Hitesh Sethia said the firm will increase spending on its joint ventures with BlackRock and Allianz. “Given the massive opportunity in the country for deeper penetration in sectors like investment solutions and insurance, we are accelerating our investments towards some of our newer businesses, including our JVs with BlackRock and Allianz in these areas, which will yield significant benefits over a period of time,” Sethia said.
The stock's reaction to the earnings beat comes after a prolonged period of underperformance. Despite Friday's rally and a 1.2% gain over the past month, shares are down 17% year-to-date and 22% over the past year. The stock remains well below an August 2025 high of ₹338.60, having touched a 52-week low of ₹223.30 in March 2026.
Motilal Oswal retained its 'Buy' rating with a target price of ₹315, implying a 34% upside. The brokerage projects a 46% compound annual growth rate for consolidated profit after tax through FY28, a forecast that hinges on the company's ability to convert its current spending into profitable market share. Jio Financial's market capitalisation stood at over ₹1.61 lakh crore as of Friday.
