JM Financial: Here's Why This Analyst Projects Rs 1,000-Crore Profit In FY26

JM Financial Ltd. is expected to achieve a net profit of Rs 1,000 crore in FY26, led by its pivot to businesses that are much less cyclical compared to stock markets, according to Digant Haria, co-founder of GreenEdge Wealth.

"In FY25, they did around Rs 800 crore of profit," Haria said in a conversation with NDTV Profit on Wednesday. "I think you add Rs 150 crore to Rs 200 crore to that just because of the credit cost."

"We spoke that there could be write-backs in the old business, so that credit losses will be very low. So, maybe Rs 1,000 crore of base profit and after that, you can have a 15% to 18% kind of compounding," he said.

The diversified financial services group is pivoting away from its traditional wholesale lending business and focusing on new, less cyclical growth engines. Haria highlighted that JM Financial's exit from its traditional lending portfolio, particularly in real estate, has been a painful but necessary process. "The old business is running down and that's why provisions and non-performing assets appeared high last year."

"There could be a lot of write-backs because their NPAs are backed by land and projects. It's not as if it's a retail loan, which will never come back. So I think there could be a good amount of write-backs also," the analyst added.

These write-backs could reverse the earnings pressure seen over the past three years. "What was a headwind then could probably become a tailwind," he noted.

JM Financial is focusing on three less cyclical businesses: wealth management, asset management and affordable housing finance. "I think these businesses are much less cyclical compared to the stock markets, so I think whatever they lose out on that lending, that will be made up here," he highlighted.

The company is also returning to its core strength in deal-making, including mergers and acquisitions, IPOs and structured products, with an emphasis on earning fee income rather than interest income. "Deal-making is the DNA of JM Financial. Now they will earn more of fee income and less of interest income," he explained.

Haria highlighted that JM Financial is not abandoning lending entirely but rather re-strategising. The company is phasing out long-tenure loans (five to seven years) in favour of shorter-duration loans (six to 18 months), leveraging its core expertise in deal-making.