JIOFIN The Profit 'Crash' That Happens Every December, Right on Schedule

The Same September Trick, Twice Running

Jio Financial Services' report for the quarter ended December 31, 2024 (Q3 FY25) tells a story this site has now seen play out twice in a row: consolidated profit after tax fell 57.2% quarter-on-quarter, from Rs. 689.07 crore in Q2 FY25 to Rs. 294.78 crore, because the Rs. 240.94 crore dividend that Reliance Industrial Investments and Holdings Limited (RIIHL, JFS's wholly-owned subsidiary) received on its Reliance Industries shares in the September quarter simply didn't repeat. That is the exact same mechanic that inflated Q2 FY24 a year earlier - a Rs. 216.85 crore RIL dividend that quarter, and zero the quarter after - which this site flagged at the time in The Quarter That Erased Last Quarter's 101% Profit Headline. Two Septembers in a row, the same dividend has landed and then vanished the following quarter. That is no longer a one-off adjustment analysts should back out - it is a predictable, recurring feature of this stock's quarterly profile, and treating each December print as a "crash" misreads what is actually a calendar effect.

The cleanest evidence for that reading: for the first time since JFS became a standalone listed group, a genuine like-for-like year-over-year comparison is possible, since the consolidated group already existed a year ago. On that basis, consolidated PAT was essentially flat - Rs. 294.78 crore versus Rs. 293.82 crore in Q3 FY24, a 0.3% move - and Pre-Provisioning Operating Profit^» (PPOP) was up just 0.9% (Rs. 318.14 crore versus Rs. 315.38 crore). The quarter-on-quarter "crash" and the year-over-year flatline are both true at once, and the YoY number is the one that actually says something about the underlying business.

Where the real movement is happening is on the lending side, away from the treasury book that drives these dividend swings. Jio Finance Limited's (JFL) loan book - branded Assets Under Management (AUM) - grew to Rs. 4,199 crore, up 248% quarter-on-quarter from Rs. 1,206 crore as of September 30, 2024. That's the first quarter this AUM number has looked like a real, scaling lending business rather than a rounding error against a balance sheet still overwhelmingly parked in equities and treasury instruments (see Beyond the Usual for just how much of this quarter's headline swings still trace back to that non-lending book).

The Prescription

JFS should keep pressing the NBFC scale-up it's now showing real traction on - a 248% quarter-on-quarter jump in AUM, after two quarters of the loan book barely registering, is exactly the kind of inflection point that should get more capital and distribution focus, not less, while the group still has a clean balance sheet and no legacy bad-loan overhang to work around.

What it should stop doing: presenting consolidated PAT as the single headline number on the results call and slide deck without also surfacing, in the same breath, how much of the group's Total Comprehensive Income this quarter came from entities its own signing auditors never reviewed (see Beyond the Usual below) - a disclosure gap that has now persisted for three consecutive quarters and, this quarter, accounts for effectively the entire swing in the headline comprehensive-income number.

Key Financial Metrics

Q3 FY25 (quarter ended Dec 31, 2024) vs. Q2 FY25 (quarter ended Sept 30, 2024) and Q3 FY24 (quarter ended Dec 31, 2023), consolidated, reported in Rs. crore

FX: Rs. 85.79 = $1 (December 31, 2024 close). As with the prior two quarters, no fresh balance sheet accompanies this filing - SEBI's listing regulations only require a full balance sheet alongside half-yearly and annual results, so this is a normal disclosure gap, not a red flag on its own (see Q2 FY25's balance sheet below, the last one filed, as of September 30, 2024). Total cash isn't available this quarter for the same reason.

Metric	Q3 FY25 (Rs. cr)	Q3 FY25 ($)	Q2 FY25 (Rs. cr)	QoQ	Q3 FY24 (Rs. cr)	YoY
Net Revenue (Total revenue from operations)	438.35	$51.1M	693.50	⚠️ -36.8%	413.61	✅ +6.0%
Operating Income (PPOP¹, before share of Associates/JV)	318.14	$37.1M	547.78	⚠️ -41.9%	315.38	✅ +0.9%
Net Income (PAT)	294.78	$34.4M	689.07	⚠️ -57.2%	293.82	✅ +0.3%
Total Comprehensive Income	(18,181.80)	-$2,119.2M	(8,148.15)	⚠️ Loss more than doubled	9,294.37	⚠️ Swung from gain to loss
Total Cash	Not available this quarter	-	-	See note above	-	-

¹PPOP is the industry-standard operating metric at an Indian bank/NBFC.

The Rs. 240.94 crore dividend RIIHL received on its RIL stake in Q2 FY25 is the whole story behind the QoQ swing: dividend income went from Rs. 240.94 crore to zero, and the Share of profit of Associates and Joint Ventures fell from Rs. 225.71 crore to Rs. 59.08 crore for the same reason - Reliance Services and Holdings Limited (RSHL), an associate accounted for under the equity method, also received a RIL dividend last quarter that didn't recur. Net gain on fair-value changes actually held up better than either of those lines (Rs. 206.93 crore to Rs. 191.36 crore), which is what kept the YoY comparison from also looking dividend-driven - fair value gains were up both YoY and only modestly down QoQ, suggesting the treasury book's mark-to-market performance, not just the dividend calendar, is a genuine (if volatile) contributor most quarters.

Total Comprehensive Income tells the more dramatic version of the same underlying story: a Rs. 12,583.20 crore unrealized loss on the group's Equity instruments through OCI (predominantly the inherited RIL stake), on top of a Rs. 7,692.54 crore negative Share of OCI in Associates and Joint Ventures, pushed TCI to a Rs. 18,181.80 crore loss this quarter - deeper than last quarter's Rs. 8,148.15 crore loss, and a complete reversal from Q3 FY24's Rs. 9,294.37 crore gain. Nine months into FY25, cumulative TCI stands at a Rs. 20,185.42 crore loss, against a Rs. 10,804.87 crore gain over the same nine months a year earlier - a roughly Rs. 31,000 crore swing in the trailing-nine-month trend, driven overwhelmingly by RIL's own share price move over the period, not by anything JFS's operating businesses did.

Two years running, this stock's headline PAT has spiked in the September quarter and dropped in the December quarter for the identical reason. A reader who wants a read on the actual business should track PPOP and the YoY PAT comparison - both roughly flat this quarter - rather than the QoQ swing, which is now a predictable seasonal artifact of when RIIHL's own RIL dividend lands.

Standalone (parent-only) results show the same seasonal pattern: PAT of Rs. 75.18 crore this quarter versus Rs. 304.83 crore in Q2 FY25 (JFS itself, not just RIIHL, received a Rs. 235.03 crore RIL dividend directly last quarter) and Rs. 70.48 crore in Q3 FY24 - a genuine +6.7% YoY gain, again far calmer than the QoQ swing suggests.

Key Operational Metrics

• NBFC loan book (Jio Finance Limited): AUM at Rs. 4,199 crore as of December 31, 2024, up 248% from Rs. 1,206 crore as of September 30, 2024 - the first quarter the lending business has shown scale. JFL now operates from 9 offices across 7 cities.
• Payments bank (Jio Payments Bank): CASA^» customer base grew 25% quarter-on-quarter to 1.89 million; Business Correspondent network expanded to roughly 7,300 outlets nationwide, focused on rural, assisted-digital-channel banking.
• Payment aggregator (Jio Payment Solutions): Received the Online Payment Aggregator license from the RBI during the quarter, allowing it to offer payment-gateway services to merchants for online commerce - a genuine capability upgrade, not just a pilot extension.
• Insurance broking (Jio Insurance Broking): Plan count more than doubled quarter-on-quarter to 54 plans, sourced from 31 insurance companies across auto, two-wheeler, health, and life categories; added 39 new corporate clients in the institutional channel.
• Digital reach: Combined average Monthly Active Users across all JFSL digital properties (the JioFinance app plus embedded offerings inside MyJio) reached 7.4 million.
• Investment JVs with BlackRock: Jio BlackRock Asset Management filed its application for final SEBI approval in December 2024, having received in-principle sponsor approval in October 2024.

As in prior quarters, the Group's businesses - now spanning investing/financing, leasing, insurance broking, payments bank, and payment aggregator/gateway services - "do not satisfy the quantitative thresholds laid down under Ind AS-108 on 'Operating Segment,'" so there is still no segment-level P&L breakout showing which license is actually driving the Rs. 37 crore of fee and commission income embedded in this quarter's total revenue.

Beyond the Usual

A third straight quarter where the entire swing in comprehensive income traces to numbers nobody at JFS has reviewed

The auditors' review report discloses that five subsidiaries - unreviewed by JFS's own signing auditors, relying instead on other auditors' reports furnished by management - reflect a Rs. 10,628.73 crore total comprehensive loss for the quarter (Rs. 11,646.53 crore for the nine months), against Rs. 307.60 crore of revenue and Rs. 155.05 crore of net profit for the same five entities. Separately, two joint ventures and an associate whose results are also unreviewed by JFS's auditors reflect a further Rs. 7,631.92 crore total comprehensive loss for the quarter (Rs. 8,597.89 crore for nine months). Add those two unreviewed pools together and they come to roughly Rs. 18,260 crore of comprehensive loss - which is, within rounding, this quarter's entire consolidated Total Comprehensive Income loss of Rs. 18,181.80 crore. In other words, on the numbers disclosed, essentially none of this quarter's headline comprehensive-income swing has actually been reviewed by JFS's own statutory auditors. This is the same structural gap flagged in the debut quarter and the quarter after it - relying on component auditors for subsidiaries and JVs is standard practice for a group this size, and isn't disqualifying on its own - but three quarters running of the entire swing in the number JFS presents as its comprehensive result sitting outside its own auditors' review is a pattern serious enough to flag at the top tier, not the middle one.

The Reliance Industries dividend now has a two-year track record inside JFS's own numbers

This is the second consecutive year RIIHL (and, in FY25, JFS standalone directly) has received a Reliance Industries dividend in the September quarter with nothing in December: Rs. 216.85 crore in Q2 FY24 versus zero in Q3 FY24, and Rs. 240.94 crore in Q2 FY25 versus zero in Q3 FY25. RIL's own dividend calendar (an interim dividend historically declared alongside its own results, paid out in the September-October window) is the mechanical explanation, and there is nothing irregular about it - but a two-year pattern is no longer a one-off analysts should treat as noise each time it recurs. A reader modeling JFS's quarterly PAT should build in a September-quarter dividend bump and a December-quarter reversal as a standing feature of the model, not a surprise to re-discover every year.

JFS formally became a Non-Deposit Taking Systemically Important Core Investment Company (CIC-ND-SI) effective July 9, 2024, per the RBI's certificate of registration - resolving the conversion this site flagged as pending after JFS filed its application in the debut-year Q3 post. The classification changes JFS's regulatory capital and group-structure rules going forward, distinct from being an operating NBFC itself.

A small equity-structure cleanup closed out this quarter: 1,42,565 partly-paid equity shares held by "JFSL TRUST-PPS (RIL)" - a legacy artifact of the original 2023 demerger scheme - were forfeited and cancelled by Reliance Industries with effect from October 22, 2024, trimming JFS's paid-up equity share capital marginally from Rs. 6,353.28 crore to Rs. 6,353.14 crore, with the difference credited to capital reserve. Immaterial in size, but it's the final loose thread from the original scheme of arrangement working its way out of the share register.

Management's Emphasis on Execution, Not the Optics Behind It

CEO Hitesh Sethia's opening framing centered on "operational execution" and being "firmly in an expansion mode," anchored by the concrete AUM jump (Rs. 1,206 crore to Rs. 4,199 crore), the 25% CASA growth at the payments bank, and the 7.4 million MAU figure - a materially more numbers-forward call than the debut quarter's descriptive recap. Group CFO Abhishek Pathak's financial walkthrough attributed the entire QoQ income decline to the RIL dividend not repeating and to lower fair-value gains from "redemption of certain Money Market Instruments," which is accurate as far as it goes but, as in the prior two quarters, didn't connect to the Total Comprehensive Income swing or address the unreviewed-subsidiary pool from Beyond the Usual above. There was again no Q&A - the call closed in listen-only mode with no analyst questions taken, the third quarter running with this format.

Target Valuation Range

Fair-value range: roughly Rs. 216-281/share (~Rs. 1,37,100-1,78,300 crore, ~$16.0-20.8 billion), the ceiling widened further given the first quarter of genuine AUM scale. At Rs. 298.70, JFS trades only modestly above that ceiling - the narrowest gap yet between price and this framework's fair value - still too early to price with real conviction, though the gap is closing as the loan book scales. Book value is stale by a full quarter, and this quarter's own numbers show the group's comprehensive income is still dominated by an equity-and-associate portfolio capable of double-digit-thousand-crore swings in either direction.

JFS's share price fell from Rs. 350.60 at the end of September 2024 to Rs. 298.70 at the end of December 2024, a 14.8% quarterly decline, though it remains well above its October 2023 low (Rs. 219) and below its April 2024 high (Rs. 377) - a swing large enough over the trailing two years to be worth naming, even though this specific quarter's move alone doesn't warrant a dedicated section.

Market cap / book value	Q3 FY2025 (Dec 2024)
Share price (period-end)	Rs. 298.70
Shares outstanding	6,353,141,623
Market capitalization	Rs. 1,89,768 crore (~$22.1B)
Book value (last disclosed, Sep 2024)	Rs. 1,37,144.04 crore
P/B (stale denominator)	~1.38x

No fresh balance sheet accompanies this filing (see Key Financial Metrics above), so book value must be taken from the last disclosed consolidated net worth.

Peer-multiple sanity check	Q3 FY2024 (Dec 2023)	Q3 FY2025 (Dec 2024)
P/B	~1.28x	~1.38x
Annualized ROE	~1.5%	~1.3%

Up on P/B, though the two aren't a clean like-for-like given the stale, quarter-old denominator each time. Annualizing nine-month consolidated PAT (Rs. 1,296.48 crore × 4/3 ≈ Rs. 1,728.6 crore) against September 30, 2024's net worth implies an annualized ROE of roughly ~1.3% - still very low for a financial-services business, though the direction is now genuinely being pulled by a scaling loan book rather than staying flat on a pure investment portfolio.

DCF / reverse DCF: Still not attempted. Three quarters in, the operating businesses collectively generate a small enough share of total revenue (fee and commission income of Rs. 37 crore this quarter, against Rs. 438 crore of total revenue) that a credible multi-year free-cash-flow projection isn't yet supportable - see Key Operational Metrics above for the segment-disclosure gap that also limits this.

What would need to be true for the current price to look cheap: this quarter's AUM jump would need to be the start of a real, multi-quarter lending scale-up rather than a one-quarter pop, and the payments bank's CASA growth and insurance broking's plan expansion would need to convert into disclosed, recurring fee and interest income at a pace that meaningfully lifts ROE above its current ~1.3% - all while the treasury/associate portfolio's TCI swings (see Beyond the Usual) stay large enough that a reader still can't treat book value as a stable anchor quarter to quarter.

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