JM Financial (JMFINANCIL)
TurnaroundFairStock Score: 63/100 — STEADY
Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 1/1
Key Financials
| Current Price | ₹126.43 |
| Market Cap | ₹12,098.84 Cr |
| P/E Ratio | 11.64 |
| ROCE | 9.39% |
| ROE | 12.81% |
| Dividend Yield | 1.38% |
| Profit Growth | -35.7% |
| Debt/Equity | 1.02 |
| Sales Growth | -10.3% |
| Free Cash Flow | ₹3,094 Cr |
| Promoter Holding | 56.9% |
| 52-Week Range | ₹112 — ₹184.54 |
| Sector | Finance |
| Book Value | ₹111.44 |
Strengths
- P/E of 9.68 and P/B of 1.37 are modest; price is 26% below Graham Number of ₹172.82.
- Free cash flow of ₹3,094 Cr and Piotroski F-score of 7/9 indicate improving financial health.
- Promoter holding of 56.90% aligns ownership with minority investors.
- Latest quarter net profit of ₹318 Cr on ₹999 Cr sales shows strong earnings recovery.
- Dividend yield of 2.11% provides some income while waiting for a turnaround.
Concerns
- Revenue declined 11.41% and 5-year CAGR is only 6.55%, so top-line growth is weak.
- Altman Z-Score of 1.21 suggests potential financial stress; debt/equity of 1.10 needs monitoring.
- EV/EBITDA of 266.79 is abnormal and raises questions about earnings quality and classification.
- Holding company structure can create complexity and a holding company discount.
AI Analysis
At ₹139, JM Financial trades at 9.68 times earnings and 1.37 times book, with a 2.11% dividend. That looks cheap, but cheap can be a value trap. This is a holding company, so the first question is: what quality of assets am I buying? Sales fell 11.41%, and five-year revenue CAGR is only 6.55%. Those are not growth numbers. Profit jumped 190.73%, yet the latest quarter of ₹999 Cr sales produced ₹318 Cr net profit, a roughly 32% margin. That is unusually high for a diversified financial firm, so I must suspect one-off gains or accounting noise rather than durable earning power. Return on equity of 12.81% is acceptable, but not a moat. Debt-to-equity of 1.10 is manageable, and free cash flow of ₹3,094 Cr is a real comfort. A Piotroski score of 7 improves my confidence in the recovery. Still, Altman Z of 1.21 is a warning flag, and EV/EBITDA of 266.79 makes no sense for an operating business. The Graham Number of ₹172.82 gives a 26% margin of safety at the current price. The DCF value of ₹1,732.04 is so far from price and book value that I would treat it as an optimistic fiction. FairStock score of 82 says high conviction, but I need proof that the earnings bounce can become sustained growth. This is a possible turnaround, not a compounding stalwart. I would keep it on my watch list and wait for revenue and profit to grow together.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer