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JMFINANCIL - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.1
📊 Financial Overview
- Profitability: PAT grew marginally from ₹132 Cr to ₹133 Cr QoQ, but YoY growth is a robust 285%.
- Return Metrics: ROE at 12.6% and ROCE at 12.8% reflect solid capital efficiency for a financial services firm.
- Valuation: P/E of 24.8 is slightly above the industry average (20.8), but justified by strong earnings growth.
- P/B Ratio: With a book value of ₹46.7 and price of ₹164, P/B is ~3.5, indicating moderate premium valuation.
- PEG Ratio: 1.37 suggests fair growth-adjusted valuation.
- Debt Profile: Debt-to-equity ratio of 0.01 is extremely conservative, highlighting strong balance sheet health.
- Momentum: RSI at 43.0 and MACD at -1.12 indicate neutral to mildly bearish sentiment, offering a potential entry opportunity.
🏢 Business Model & Competitive Edge
- JM Financial operates across investment banking, asset management, and lending, offering a diversified revenue base.
- Strong presence in capital markets and advisory services gives it a competitive edge in cyclical upswings.
- Low leverage and consistent profitability support long-term sustainability.
💡 Entry Zone Recommendation
- Current price is below DMA 50 (₹172) and above DMA 200 (₹149), suggesting a consolidation phase.
- Suggested Entry Zone: ₹155–₹165 for accumulation.
- Long-term holding is favorable given strong fundamentals and low debt risk.
✅ Positive
- Exceptional quarterly profit growth (285%).
- Very low debt-to-equity ratio (0.01), indicating financial prudence.
- FII holdings increased by 0.69%, reflecting growing institutional confidence.
⚠️ Limitation
- P/E slightly above industry average may limit short-term upside.
- Stock trading below DMA 50 suggests weak near-term momentum.
- DII holdings declined by 0.92%, signaling cautious domestic sentiment.
📉 Company Negative News
- Minor decline in trading volume and MACD suggests short-term weakness.
- Stock has corrected from its 52-week high of ₹200, indicating resistance at higher levels.
📈 Company Positive News
- Strong earnings momentum and improving ROE/ROCE metrics.
- Favorable analyst outlook due to diversified business model and low leverage.
🏭 Industry
- Financial services sector is benefiting from rising credit demand and capital market activity.
- Industry P/E of 20.8 supports moderate valuation expansion for quality players.
🧾 Conclusion
- JM Financial is a fundamentally strong and conservatively managed financial services firm.
- Entry near ₹155–₹165 offers a good long-term opportunity.
- Ideal for investors seeking stable growth with low balance sheet risk.
Sources
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