JM Financial reverses digital spend, real estate lending in single call
Three months after pledging investment in tech and real estate, management cut digital burn and paused property loans, citing poor risk-adjusted returns.
What's new
- Private credit loan book halved from ₹10,000 cr (FY24) to ₹4,000 cr (FY26) with real estate paused.
- BlinkTrade digital broking costs targeted for significant cuts over next 3-6 months.
- Affordable home loans IPO timeline stretched to 2028 or 2029, from earlier FY28 target.
Themes from the call
Strategy reversal
Management walked back prior commitments on both digital spending and real estate lending within a single quarter, offering new reasoning for each.
Fee-based pivot
The business is shifting from balance-sheet lending toward syndication and fee income, with private credit book deliberately shrunk to ₹4,000 cr.
Near-term headwinds
FII ownership dropped to 15% from a 19% peak, primary market deal flow dried up in March-April, and oil prices remained elevated above $100 for three months.
Guidance watch
- Wealth management targeted at 20-25% net inflows (₹6,000 cr annually) in FY27 to build scale.
- Private credit book targeted at 15-20% growth to ₹5,000 cr in FY27, driven by corporate loans, not real estate.
- Management expects an upturn in H2 FY27 once FII activity returns.
Risk flags
- Three strategy reversals in one quarter (digital spend, real estate lending, IPO timeline) weaken the credibility of forward guidance.
- Deal pipeline of ₹2 lakh crore is strong but dependent on FII return within 12-18 months, with no visibility on timing.
Key quotes
-
"The risk-adjusted returns in real estate are still not attractive enough for us to deploy money, so we are going slow there."
— Vishal, CEO -
"We are cutting those investments down significantly. You will hear more about the plans around BlinkTrade."
— Vishal, CEO
The brief
JM Financial spent the last two quarters telling investors it would invest heavily in digital infrastructure and grow its real estate loan book from a cyclical bottom. This quarter it reversed both. CEO Vishal told the street the company is cutting digital and BlinkTrade spending significantly over the next 3-6 months, and that real estate lending is paused because risk-adjusted returns aren't attractive enough. The private credit book has been deliberately shrunk from ₹10,000 cr in FY24 to ₹4,000 cr in FY26, with the strategy now shifting from balance-sheet lending toward syndication and fee income. The company has also pushed the affordable home loans IPO target to 2028 or 2029, from an earlier FY28 goal. The underlying business is growing — wealth management revenue up 18%, asset management up 37-38% — but the execution story is muddled. Management's target of 15% revenue growth and 15% ROE by the end of the investment cycle is presented as a long-term anchor, yet the cycle's contours keep changing. The ₹2 lakh crore deal pipeline is real, but it depends on FII capital returning within 12-18 months, a window management cannot control. H2 FY27 is supposed to be the turn, but that's the fourth consecutive quarter of the same call.
Three reversals in one quarter suggests JM Financial is still searching for a strategy, not executing one.