Jio Financial Services shares fell 2.5% on Friday following the company's disappointing quarterly results, making it one of the top losers on the benchmark Nifty 50. According to Business Standard, the stock fell 2.60% to the day's low of ₹213.05 on the BSE, while as of 10.58 PM, the Mukesh Ambani-backed firm's stock was down 1.05% at ₹216.45. The market reaction reflects investor concerns over the company's ability to maintain profitability despite strong revenue growth, with the stock performance highlighting the market's focus on bottom-line metrics over top-line expansion. Analysts at Motilal Oswal Financial Services (MOFSL) said healthy execution continued to drive growth, but higher provisions prompted earnings estimates cut for FY27, with the company missing MOFSL's estimates by 27%.
Jio Financial Services Limited (JFSL) reported a 51.02% year-on-year decline in consolidated net profit for Q2 FY27, with profits falling to ₹340.44 crore compared to ₹695.04 crore in Q2 FY26. According to reports from ET Now, The Economic Times, and Business Standard, this bottom-line pressure came despite the company achieving significant revenue growth during the quarter. However, the company's pre-provisioning operating profit (PPOP) rose 85% year-on-year to ₹574 crore in Q2FY27, indicating strong operational performance beneath the headline profit figures. The decline was partly attributed to the absence of dividend income during the September quarter, as the company had recorded dividend income of ₹269 crore in Q2 FY26 and ₹508.6 crore in the June quarter of FY27. The share of loss of JV & Associates stood at ~₹43.9 crore versus a loss of ~₹19.1 crore in Q2 FY26, with full consolidation of Reliance Services and Holdings (RSHL) as a 100% step-down subsidiary effective from April 30, 2026.
Total revenue from operations demonstrated strong momentum, surging 73.15% YoY to ₹1,699.28 crore for the quarter, up from ₹981.39 crore in Q2 FY26. As reported by ET Now, The Economic Times, and Business Standard, this robust revenue growth was primarily driven by a sharp rise in core interest income, which more than tripled to ₹1,257.68 crore in the July-September quarter of FY27 from ₹392.37 crore in the year-ago quarter. Net interest income (NII) soared 165% year-on-year to ₹680 crore in Q2FY27, compared with ₹257 crore in the corresponding quarter of the previous fiscal. Other income declined 28% YoY to ₹440 crore, which included investment income of ₹160 crore. On a sequential basis, revenue from operations fell 15.2% from ₹2,004.5 crore in the June quarter, while net profit declined 59% from ₹830.3 crore in the previous quarter.
The company's Fees, Commission & Other Services segment grew 98.15% YoY to ₹277.09 crore compared to ₹139.84 crore in Q2 FY26. According to The Economic Times and Business Standard, income from fees and commissions rose 98% to ₹277 crore, compared with ₹140 crore in the year-ago period. This significant increase in service revenue contributed to the overall revenue growth trajectory during the quarter. The lending segment continued to expand significantly, with revenue rising to ₹920.4 crore from ₹301.1 crore in the year-ago quarter, while profit after tax from the lending business increased to ₹147.9 crore from ₹75.7 crore. Growth remained broad-based, driven by disciplined loan book expansion at Jio Credit, rapid scaling of asset management offerings under the BlackRock JVs, and steady growth in payments, as noted by MOFSL.
Total expenses surged 167.09% YoY to ₹1,166.07 crore in the reporting quarter from ₹436.50 crore, primarily due to higher finance costs and operational scaling requirements. As reported by ET Now, The Economic Times, and Business Standard, total expenses also increased 166% year-on-year to ₹1,125 crore in Q2FY27, from ₹423 crore in the corresponding quarter of the previous fiscal. Finance costs rose significantly to ₹577.7 crore from ₹135.8 crore, while impairment on financial instruments increased to ₹40.8 crore from ₹13.2 crore. Other income also fell sharply to ₹13 lakh from ₹21 crore in the year-ago quarter. This significant increase in expenses outpaced the revenue growth, contributing to the net profit decline despite strong top-line performance.
The non-banking financial company (NBFC) business reported a 140% year-on-year increase in PAT to ₹120 crore, driven by sustained growth in assets under management (AUM). According to The Economic Times and Business Standard, the company maintained targeted investments to scale growth-stage businesses and incubate nascent ventures. Total consolidated shareholders' equity stood at ₹1.3 lakh crore as of September 30, 2026. The NBFC business delivered strong performance with net processing margin improving to 14 basis points in Q2FY27, compared with 9 basis points in Q2FY26 and 12 basis points in Q1FY27. However, revenue from the investing segment declined to ₹521.4 crore from ₹727.9 crore year-earlier, while profit after tax from this segment fell to ₹238.7 crore from ₹651.3 crore. MOFSL cut the FY27 EPS estimate by ~6.6% to account for higher provisions, while raising the FY28 EPS estimate to reflect improved NII. The brokerage reiterated the BUY rating on the stock with a target price of ₹300, modeling a consolidated PAT CAGR of 54% over FY26-FY28 and noting that the stock trades at 0.9x FY27E P/BV.
The company demonstrated significant digital and business expansion during the quarter. As reported by The Economic Times and Business Standard, Jio Financial Services issued more than 34 crore points to 77 lakh customers, while PPC among JioPoint was 25% higher. The company's JioBlackRock Liquid Fund ranked first since inception, with quarterly average assets under management (QAAUM) of more than ₹10,000 crore. The Specialised Investment Fund (SIF) assets under management scaled to ₹478 crore within three months of launch, placing it among the top 10 in the category. The direct-to-customer channel recorded a 55% quarter-on-quarter increase in conversion rates across products, while the institutional channel reported 35% growth in account acquisitions and renewals. In a significant development, Bank of America agreed to invest up to ₹18,268 crore in Jio Credit, Jio Financial Services' wholly owned lending subsidiary, giving the US bank a 49.9% stake in the lending business subject to regulatory approvals.
