JM Financial Q2 net profit up 7.3% at Rs 139 crore despite dip in revenue

JM Financial on Tuesday reported a consolidated net profit of Rs 139.06 crore for the quarter to September, a growth of 7.31 per cent over the same period last fiscal, despite a 5.6 per cent decline in revenue due to the pandemic.

Total income declined to Rs 803.40crore, down 5.64 per cent, the company said in a statement.

For the first half of the year, its net profit rose 17.5 per cent to Rs 392.17 crore on an income of Rs 1,707.52 crore, which grew 12.5 per cent year on year.

The company has made a special pandemic provision of Rs 123 crore for the quarter.

Due to the lockdowns, total loan book declined to Rs 11,386 crore from Rs 13,810 crore in September 2019.

Gross NPAs and net NPAs rose to 1.69 per cent and 1.13 per cent, respectively for the quarter compared to 1.27 per cent and 1.11 per cent, respectively in September 2019.

"We have made additional gross provisions of Rs 123 crore on account of the uncertainties around the pandemic for the September quarter, taking the total provisions to Rs 298 crore on account of the pandemic since April," JM Financial group managing director Vishal Kampani said.

"Despite the headwinds arising from the pandemic investment banking, wealth management and securities business have shown strong performance. But lockdown induced economic disruptions continue to impact other businesses especially the credit business," he said.

Investment banking, wealth management and securities business gained traction during the quarter, he said, adding assets under its private wealth management business rose to Rs 54,015 crore from Rs 46,818 crore in September 2019 and Rs 47,579 crore in June 2020.

During the quarter, the average daily trading volume stood at Rs 12,582 crore.

Mortgage lending book comprising loans JM Financial Credit Solutions and JM Financial Home Loans, stood at Rs 7,526 crore.

SMA2 accounts nearly doubled from 1.82 per cent of the portfolio to 3.42 per cent.

The ARC business acquired total dues of Rs 60,401 crore at a gross consideration of Rs 17,079 crore. Security receipts of Rs 22 crore were redeemed in the quarter while outstanding security receipts marginally declined to Rs 11,429 crore from Rs 11,441 crore in June.

The average AUM of its asset management business stood at Rs 4,182 crore, comprising Rs 905 crore in equity schemes and Rs 3,277 crore in debt schemes.