JM Financial Q3 Results: Profit Jumps 50% to ₹313 Crore

Introduction

JM Financial Limited announced its financial results for the third quarter of fiscal year 2026 on February 5, 2026, revealing a robust 50% year-over-year (YoY) increase in consolidated Profit After Tax (PAT) to ₹313 crore. This strong bottom-line growth was achieved despite a significant one-time exceptional charge that impacted pre-tax profits. The performance was largely driven by healthy expansion in the company's fee-based businesses, particularly wealth management and corporate advisory, signaling solid underlying operational strength.

A Closer Look at Q3 Performance

For the quarter ended December 31, 2025, JM Financial's consolidated revenue from operations remained relatively flat, with a marginal YoY increase of 0.48% to ₹1,125.87 crore. However, the consolidated Profit Before Tax (PBT) saw a notable decline of 42.46% YoY, falling to ₹164.91 crore from ₹286.58 crore in the corresponding quarter of the previous year. This drop was primarily attributed to an exceptional charge of ₹121.67 crore recognized due to the statutory impact of new Labour Codes. This one-off expense overshadowed the otherwise stable revenue performance for the quarter. Despite the PBT decline, the consolidated PAT surged, and the Basic Earnings Per Share (EPS) for the quarter stood at ₹3.27, up 50% from ₹2.18 in Q3 FY25.

Nine-Month Performance Shines

The financial picture for the nine-month period ended December 31, 2025 (9MFY26), was exceptionally strong. The company's consolidated PAT grew by an impressive 69% YoY to ₹1,037 crore. The consolidated PBT for the same period jumped by 95.12% YoY to ₹1,337.33 crore. This substantial increase was significantly bolstered by a non-recurring income tax refund of ₹223.32 crore, which included ₹112.80 crore in interest. This refund was credited in November 2025 and boosted the 'Other Income' category, highlighting that a portion of the nine-month profit growth was due to non-operational factors.

Segment-Wise Growth Drivers

JM Financial's diversified business model showed strength across several key segments, which acted as primary growth engines during the quarter.

Wealth and Asset Management: This segment continued its strong growth trajectory. Recurring Assets Under Management (AUM) increased by 33% YoY to ₹33,144 crore. The company also expanded its reach, with the headcount of sales and wealth Relationship Managers (RMs) increasing by 41% YoY to 1,057.

Affordable Home Loans: The affordable housing finance business demonstrated robust expansion. Its AUM grew by 23% YoY to ₹3,183 crore, while the customer base crossed 30,000, marking a 32% YoY increase. This reflects the company's focus on granular growth in this segment.

Corporate Advisory and Capital Markets: The investment banking division had a busy quarter, closing 12 capital market transactions amounting to approximately ₹36,000 crore. This underscores the firm's strong position in the advisory and capital raising space.

Financial Highlights Table

Management's Perspective

Mr. Vishal Kampani, Vice Chairman and Managing Director of JM Financial Limited, expressed satisfaction with the results. He commented, “Our reported PAT has crossed ₹1,000 crore in the first nine months… The expansion in wealth and asset management business is on track… Affordable home loans business continues to remain granular and had a strong quarter with 32% YoY growth in customers and 23% YoY growth in AUM.” His commentary emphasized the successful execution of the company's strategy to scale its key business verticals.

Operational Changes and Potential Risks

Effective April 1, 2025, JM Financial has reorganized its operations into four new reportable segments: Corporate Advisory and Capital Markets, Wealth and Asset Management, Private Markets, and Affordable Home Loans. This change aims to provide greater clarity on the performance of each business line. However, investors should note a potential risk related to its subsidiary, JM Financial Services Limited (JMFSL). The subsidiary is appealing against orders from the Income Tax Appellate Tribunal (ITAT) concerning its arbitrage business for assessment years 2012-13 to 2014-15. This represents a contingent liability and remains an area to monitor.

Analysis and Outlook

The Q3 FY26 results present a nuanced view of JM Financial's health. While the 50% PAT growth is a strong headline number, it is important to look deeper. The underlying operational performance, especially the 32% growth in fees and commission income, is a clear positive. This indicates that the core fee-generating businesses are performing well. However, the quarterly PBT was significantly impacted by a one-off charge, and the nine-month PBT was inflated by a non-recurring tax refund. The company's future performance will depend on its ability to sustain the momentum in its wealth management and affordable housing businesses while navigating the competitive landscape in investment banking.

Conclusion

JM Financial's third-quarter results showcase strong profitability driven by solid operational execution in its core segments, even as one-time items affected pre-tax earnings. The consistent growth in wealth management AUM and the expansion of the affordable home loan book are key positives. Moving forward, investors will be closely watching the performance of the newly defined business segments and the resolution of the outstanding tax-related legal matters.