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JM Financial Q4 FY26: Profits at a High, Markets Still in a Mood

JM Financial ended FY26 with its highest ever annual consolidated profit after tax. Consolidated PAT rose 46% year on year to INR 1,202 crore, while operating PAT was INR 1,133 crore after adjusting for two items management highlighted: interest on an income tax refund of INR 113 crore and a statutory impact from new labour codes of about INR 22 crore. Consolidated net worth stood at INR 10,605 crore, translating to a book value of about INR 111 per share.

The quarter itself told a more cautious story. Q4 FY26 net revenue declined to INR 584 crore from INR 665 crore a year ago, and PAT fell to INR 159 crore from INR 235 crore. Management attributed the softness primarily to market volatility and lower primary issuance activity. In other words, FY26 confirmed the benefits of the strategic pivot announced in May 2024, but Q4 also showed that the capital markets engine can still swing sharply with sentiment.

A group becoming more fee-led, but still cyclical

Management’s two-year recap positioned the firm as increasingly focused on high growth and high return-on-equity businesses. Corporate Advisory and Capital Markets (CACM) and Wealth Management remain central to the fees, commission and brokerage pool, which management said grew 10% year on year to INR 1,753 crore in FY26.

A key nuance in the story is that consolidated revenue growth has been constrained by the planned reduction of the Private Markets loan book. This shows up in segment revenue trends: most growth segments expanded, but Private Markets revenue declined as the balance sheet was de-risked. Management’s view is that this was a conscious trade-off, and that the next phase is to build a more syndication-led, fee-generative Private Markets franchise.

Financial snapshot

Segment lens: what drove FY26 and what held back Q4

CACM remained a key franchise builder, with management highlighting leadership positioning, repeat client flows, and a large IPO pipeline. In FY26, CACM segment revenue rose to INR 946 crore (up 20.1% year on year). Management said it closed 41 capital markets transactions aggregating to about INR 95,000 crore and filed documents for 55 IPOs aggregating to about INR 1,40,000 crore.

The weak spot was the quarter. CACM segment PAT fell to INR 39 crore in Q4 FY26 from INR 101 crore in Q4 FY25. Management attributed the decline to reduced primary issuance amid geopolitical tensions and volatility, and it indicated that transaction execution in FY27 could remain slow until market visibility improves.

Private Markets was the most dramatic swing in profitability. Segment revenue fell to INR 1,298 crore in FY26 from INR 1,834 crore in FY25, explicitly linked to the planned reduction of the loan book. Yet segment PAT rose to INR 543 crore in FY26 from INR 151 crore in FY25. The investor presentation showed meaningful de-risking at the balance sheet level, with segment gross D/E falling to 0.9x in FY26 from 1.9x in FY24.

In the concall, management reiterated that recoveries remain a key financial driver for Private Markets. It had guided INR 250 to 300 crore of recovery in each of FY26, FY27 and FY28, achieved over INR 270 crore in FY26, and stated it expects to stay within that range for FY27.

Wealth Management showed steady operating progress and continued investment. FY26 segment revenue rose to INR 1,403 crore and PAT was INR 132 crore. The business expanded headcount and physical presence, with sales and wealth RM strength up 30% year on year to 1,046 and branches rising to 72. Recurring AUM increased 10% year on year to INR 30,838 crore, and management highlighted that recurring AUM is now 29% of total AUM.

Importantly, management framed FY27 as a productivity year. It said the major recruitment phase is over and the focus is now on improving productivity and profitability. In Q&A, management also said it is cutting down investments in BlinkX digital broking, which it described as INR 40 to 50 crore of annual investment, with savings expected to start showing within the next quarter and over three to six months.

Asset Management continued to scale, but remained loss-making. FY26 revenue was INR 56 crore, while the segment loss after minority interest was about INR 30 crore. Management fees from the mutual fund business increased 65% to about INR 44 crore, and it spoke about a pipeline of AIF launches including a pre-IPO fund and a credit fund.

Affordable Home Loans remained the most straightforward compounding story in the portfolio. FY26 revenue rose 25.2% year on year to INR 455 crore, and segment PAT rose 45.5% to INR 74 crore. AUM grew 22% year on year to INR 3,460 crore, with GNPA at 0.5% and collection efficiency at 99.4% at March 31, 2026. The presentation highlighted an average ticket size of about INR 10 lakh and average LTV of 59%, indicating a granular book.

What management is signalling for FY27

The strongest forward-looking commentary came through in a few explicit guideposts.

First, CACM. Management expects a slower start to FY27 if volatility continues, but it expects the second half of FY27 to be better than the first half. It also reiterated that the IPO pipeline is building, but conversion depends on market conditions and the return of risk appetite.

Second, Private Markets. Management guided 15% to 20% growth in the core loan book in FY27, implying a book of roughly INR 5,000 crore by March 2027. It also reiterated recoveries guidance of INR 250 to 300 crore for FY27. The commentary was cautious on real estate lending, citing weaker risk-adjusted returns, and suggested future growth is more likely to come from corporate credit along with a syndication-led model.

Third, Wealth. Management indicated an outlook of 20% to 25% growth for FY27, and in response to a specific question, it confirmed a target of about INR 6,000 crore of inflows. It also said margin expansion is a core focus this year, with productivity expected to kick in over the next three to six months.

Finally, the longer-term north star was articulated in plain terms: management said it would view the restructuring as successful if it can deliver about 15% revenue growth and about 15% return on equity through the cycle, while acknowledging that CACM will remain seasonal and should be judged peak-to-peak.

Takeaways

JM Financial’s FY26 numbers show why the May 2024 pivot mattered. The company has grown and strengthened its fee franchises in CACM and Wealth, de-risked Private Markets materially, and built an Affordable Home Loans platform with strong reported asset quality. At the same time, Q4 FY26 was a reminder that the CACM engine is sensitive to capital market cycles, and Asset Management is still in its investment and loss phase.

The FY27 setup, based on management commentary, hinges on three deliverables: a market window reopening for CACM execution, Private Markets shifting to a more syndication and fee-led growth model while sustaining recoveries, and Wealth delivering productivity-led margin expansion after a period of talent build-out. If these occur together, the company’s stated 15% revenue growth and 15% ROE ambition becomes more testable in the numbers. */