Shares of Jio Financial Services traded higher by over 2% at Rs 242 today, March 11 after brokerage Motilal Oswal Financial Services initiated coverage on the stock with a ‘Buy’ rating and a target price of ₹320, implying around 36% upside from current levels.
The stock was trading at ₹241.05, up over 2%, on the National Stock Exchange of India during the session. It touched an intraday high of ₹242.80, with strong trading volumes exceeding 80 lakh shares.
Building a next-generation financial platform
Motilal Oswal said Jio Financial is positioning itself as a technology-led financial services platform spanning lending, payments, asset management, insurance and wealth management.
The brokerage highlighted that the company is leveraging the massive ecosystem of its parent group, including over 500 million telecom subscribers and the extensive Reliance Retail network, to acquire customers at significantly lower costs compared with traditional financial institutions.
Ecosystem advantage and capital strength
The brokerage also pointed to Jio Financial’s strong ecosystem advantages, including the use of AI-driven underwriting powered by telecom and retail data.
In addition, the company benefits from a AAA credit rating, a relatively low cost of funds of around 6.99%, and a ₹157 billion promoter equity infusion, which together provide a strong capital base to support its growth ambitions.
According to the brokerage, these factors give the company a competitive edge over many traditional non-banking financial companies (NBFCs).
Lending expected to drive growth
Motilal Oswal expects lending to emerge as the key growth driver for Jio Financial.
The brokerage noted that Jio Credit’s assets under management (AUM) have reached around ₹190 billion, representing five-fold growth year-on-year. The lending strategy is currently focused on secured retail segments such as home loans, loans against property (LAP) and loans against securities (LAS).
As the lending book scales up, the brokerage expects around 90% AUM CAGR and approximately 152% profit growth between FY26 and FY28.
Multiple scalable business verticals
Beyond lending, Jio Financial is also building several complementary businesses.
Its Jio Payments Bank currently has around 3.2 million accounts and about 287,000 banking correspondent touchpoints, supporting digital payment adoption.
Meanwhile, the Jio-BlackRock asset management venture has already attracted over one million investors, positioning it as a digital-first mutual fund platform.
The company is also expanding its insurance broking operations, targeting India’s underpenetrated insurance market.
Growth outlook and valuation
Motilal Oswal estimates that Jio Financial could deliver around 48% profit CAGR between FY26 and FY28 as its lending, asset management and digital financial services businesses scale up.
Despite the strong growth outlook, the brokerage said the stock is currently trading at around 1x FY27 estimated price-to-book value, which it considers attractive for a company building a large-scale digital financial ecosystem.
The brokerage initiated coverage with a ‘Buy’ rating and a target price of ₹320, based on a sum-of-the-parts valuation for March 2028 estimates.
Comments are closed.