Buy JM Financial, target price Rs 119: ICICI Securities

ICICI Securities has buy call on JM Financial with a target price of Rs 119. The current market price of JM Financial Ltd. is Rs 81.5.

JM Financial Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 7666.75 Crore) operating in Financial Services sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 864.06 Crore, up 10.90 % from last quarter Sales of Rs 779.12 Crore and down 1.17 % from last year same quarter Sales of Rs 874.25 Crore Company reported net profit after tax of Rs 250.19 Crore in latest quarter.


Investment Rationale
High capitalisation, calibrated growth approach with low risk tolerance and superior RoA will help JMF navigate challenging phase relatively well. Rolling over to FY23E, it revises SoTP-based target price to Rs119 (earlier Rs114). Maintain BUY. Key risks: 1) more than anticipated stress in mortgage lending from DCCO extension pool; 2) delayed resolutions of distressed credit.

Promoter/FII Holdings
Promoters held 54.8 per cent stake in the company as of Dec 30, 2020, while FIIs held 24.2 per cent, DIIs 9.1 per cent and public and others 11.9 per cent.