JIOFIN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.4
| Stock Code | JIOFIN | Market Cap | 1,53,967 Cr. | Current Price | 242 ₹ | High / Low | 339 ₹ |
| Stock P/E | 221 | Book Value | 45.9 ₹ | Dividend Yield | 0.21 % | ROCE | 2.64 % |
| ROE | 2.22 % | Face Value | 10.0 ₹ | DMA 50 | 285 ₹ | DMA 200 | 295 ₹ |
| Chg in FII Hold | -0.30 % | Chg in DII Hold | 0.58 % | PAT Qtr | 73.1 Cr. | PAT Prev Qtr | 456 Cr. |
| RSI | 18.4 | MACD | -12.5 | Volume | 1,47,00,657 | Avg Vol 1Wk | 1,56,37,833 |
| Low price | 199 ₹ | High price | 339 ₹ | PEG Ratio | 4.57 | Debt to equity | 0.00 |
| 52w Index | 31.2 % | Qtr Profit Var | -2.79 % | EPS | 1.10 ₹ | Industry PE | 22.5 |
📊 Financials: JIOFIN shows weak fundamentals with ROCE at 2.64% and ROE at 2.22%, reflecting poor capital efficiency. Debt-to-equity ratio is 0.00, indicating a debt-free balance sheet, but profitability remains low. Quarterly PAT dropped sharply from 456 Cr. to 73.1 Cr., with negative profit variation (-2.79%), highlighting earnings volatility. EPS of 1.10 ₹ is very low relative to market cap, limiting shareholder value creation.
💹 Valuation: Current P/E of 221 is extremely high compared to the industry average of 22.5, suggesting severe overvaluation. P/B ratio is ~5.27 (Current Price / Book Value), which is expensive. PEG ratio of 4.57 indicates poor growth prospects relative to valuation. Intrinsic value appears much lower than CMP, offering little margin of safety.
🏢 Business Model & Competitive Advantage: JIOFIN operates in the financial services sector, focusing on lending, investment, and digital finance. While scale and brand association with Reliance provide resilience, weak return ratios, declining profits, and stretched valuations reduce its competitive edge compared to peers with stronger fundamentals.
🎯 Entry Zone Recommendation: Current price of 242 ₹ is near its 52-week low of 199 ₹, reflecting weakness. A more attractive entry zone would be around 190–210 ₹, offering better risk-reward. Long-term investors should be cautious and accumulate only on significant corrections, given stretched valuations and poor profitability trends.
Positive
- Debt-free balance sheet (Debt-to-equity ratio 0.00).
- Strong brand association with Reliance Group.
- DII holdings increased by 0.58%, showing domestic institutional support.
- High liquidity with strong trading volumes.
Limitation
- Extremely high P/E of 221 compared to industry average (22.5).
- Weak ROCE (2.64%) and ROE (2.22%) indicate poor efficiency.
- Quarterly PAT decline from 456 Cr. to 73.1 Cr.
- EPS of 1.10 ₹ is very low relative to market cap.
Company Negative News
- Sharp decline in quarterly profits raises sustainability concerns.
- FII holdings decreased by 0.30%, reflecting reduced foreign investor confidence.
Company Positive News
- DII inflows suggest domestic support despite weak fundamentals.
- Debt-free structure provides financial flexibility.
- Strong brand presence in financial services through Reliance ecosystem.
Industry
- Financial services industry P/E at 22.5 reflects moderate valuations.
- Sector growth driven by digital finance, lending, and investment services.
- Government and regulatory support enhances long-term stability.
Conclusion
⚖️ JIOFIN is fundamentally weak with low return ratios, declining profits, and stretched valuations. Despite brand strength and debt-free status, the stock trades at unsustainable multiples. Investors should avoid fresh entry at current levels and consider accumulation only near 190–210 ₹ for better margin of safety. Long-term holding carries risk unless profitability improves significantly and valuations normalize.
I can also compare JIOFIN’s valuation and efficiency metrics against other NBFCs and financial service peers to highlight relative positioning if you’d like.