Jio Financial Services Ltd Q1 FY2024-25 Earnings Conference Call
Summary
TLDRGeo Financial Services, Limited held a virtual meeting to discuss their Q1 results ending June 30th, 2024. They highlighted the launch of the Geof Finance app, secured lending initiatives, and digital banking solutions. Shareholders' approval allowed for the commencement of operating lease business and the conversion to a Core Investment Company. The company aims to democratize financial services with a focus on digital expansion and customer-centric solutions.
Takeaways
- 📈 Geo Financial Services, Limited has reported its results for Q1 of the financial year 2025, showing a robust economic growth and positive outlook for the country.
- 🚀 The company has achieved key milestones in Q1, including the launch of the GEOF Finance app in beta version, which consolidates the offerings of the JFS group on a digital platform.
- 💼 The company has been focusing on governance, policy framework, talent acquisition, and cost-effective technology to support product launches and distribution.
- 🏦 The launch of loan against mutual funds and home loans in beta mode indicates the company's acceleration in secured lending propositions.
- 🗳️ Shareholders have shown strong confidence in the company's initiatives, with 99.9% voting in favor of the postal ballot notice dated May 23, 2024.
- 🔄 The Reserve Bank of India has granted final approval for the conversion of GEOF Financial Services from an NBFC to a Core Investment Company (CIC), marking a significant regulatory milestone.
- 📱 The unified app offers various payment features, including UPI, digital bank account, auto insurance, and loan against mutual funds, with plans to expand the product suite.
- 🏢 Geo Finance Limited, the non-banking financial entity, is capitalizing on opportunities in the lending market with new products and services.
- 🏛️ The payment bank has opened over a million Kasa accounts, emphasizing the company's commitment to providing simple and robust digital banking solutions.
- 📊 Geo Payment Solutions Limited, the payment service company, offers a payment aggregation platform with innovative solutions like embedded payments and tailored point of sale systems.
- 🛡️ Geo Insurance Broking Limited aims to establish itself as a key player in the insurance market by leveraging digital distribution channels and offering a diverse portfolio of insurance products.
Q & A
What is the purpose of the virtual meeting mentioned in the script?
-The purpose of the virtual meeting is to discuss the results for the first quarter ended June 30th, 2024, and to present the business developments and financial performance of Geo Financial Services, Limited.
Who are the key speakers in the virtual meeting?
-The key speakers in the meeting are Jill Devi Prasad, the head of investor relations, Mr. Hes SAA, the MD and CEO, and Abishek P, the group Chief Financial Officer.
What is the significance of the geof finance app launch mentioned in the script?
-The geof finance app launch is significant as it consolidates the offerings of the JFS group, providing a digital, simple, and unified platform to distribute products to consumers, marking a vital digital channel to reach target customers.
How many downloads has the geof finance app achieved as per the script?
-As per the script, the geof finance app has achieved approximately half a million downloads.
What is the role of the merchant app launched in December 2023?
-The merchant app, launched in December 2023, complements the consumer app by providing another digital channel for Geo Financial Services to reach and serve its target customers.
What is the strategic significance of launching loan against mutual funds and home loans in beta mode?
-The strategic significance lies in accelerating the secured lending proposition of Geo Financial Services, offering customers more financial products and enhancing the company's market position.
What was the shareholder approval percentage for the postal ballot notice dated May 23, 2024, and what does it indicate?
-The shareholder approval percentage was 99.9%, indicating strong shareholder confidence in the company's initiatives and strategies.
What regulatory approval did Geo Financial Services receive that is considered a key milestone?
-Geo Financial Services received the final approval from The Reserve Bank of India for converting from an NBFC to a Core Investment Company (CIC), which is a significant milestone from a regulatory perspective.
What are the features of the unified app mentioned in the script?
-The unified app features various payment options including UPI, a digital bank account with end-to-end online account opening, auto insurance offerings from partner companies, and loan against mutual funds from the NBFC.
How does Geo Financial Services plan to expand its product suite and customer engagement in the coming quarters?
-Geo Financial Services plans to expand its product suite with more launches across business verticals, including the bank, NBFC, and insurance solutions. They also aim to build engaging layers to keep the customer experience best in class while solving their financial needs.
What is the current status of the physical distribution network expansion for Geo Payment Bank?
-Geo Payment Bank has received approval from The Reserve Bank of India to expand its network by about 16,000 business correspondent outlets, which will be implemented in a phased manner.
Outlines
📈 Business Milestones and App Launch
Jill Devi Prasad, head of investor relations for Geo Financial Services, Ltd., welcomes participants to the virtual meeting discussing Q1 results for the financial year ending June 30, 2024. The company has made significant progress in governance, talent acquisition, and technology. Key achievements include the launch of the Geof Finance app, secured lending propositions, and the commencement of an operating lease business. The speaker, Mr. Hes, highlights the importance of these digital channels and the support from shareholders, which is crucial for the company's strategic growth and product development.
🏢 Expansion of Digital and Lending Services
The company has received approval from the Reserve Bank of India to convert from an NBFC to a Core Investment Company (CIC), marking a significant regulatory milestone. The unified app offers various payment features, including UPI, digital banking, auto insurance, and loan services. The app is designed to be modular and can be embedded in other platforms. Geo Finance Limited has strategically positioned itself in the lending market, with new products like loan against mutual funds and an upcoming home loan service. The company also started an operating lease business with air fiber devices, enhancing convenience and affordability for customers.
💼 Financial Services and Innovations
Geo Payment Bank and Geo Payment Solutions Limited are expanding their services with innovative solutions such as UPI, digital savings accounts, and physical debit cards. The bank aims to declutter primary bank accounts with a second daily expense account. Business correspondents will facilitate account opening, payment services, and money transfers. Geo Insurance Broking Limited is establishing itself as a key player in the insurance sector, leveraging digital distribution channels and offering a diverse portfolio of insurance products. The company is also working on obtaining regulatory approvals to sell insurance policies online.
🏦 Asset Management and Financial Performance
The asset management company, in partnership with Black Rock, is focused on integrating advanced technology platforms for superior services. The company is in the process of obtaining necessary regulatory approvals. CFO Abishek Pak provides a financial overview, highlighting the company's conversion to a CIC and the establishment of business teams with robust governance. The company's financial performance for Q1 shows a profit after tax of Rs. 313 CR, with a total income similar to the previous quarter, driven by interest income, fair value changes, and fees and commission income.
📊 Financial Results and Strategic Focus
The financial results for Q1 of FY 2024-2025 show a consolidated profit after tax of Rs. 313 CR, with a total income of Rs. 418 CR. The income is derived from interest-bearing investments, fair value changes on money market and liquid mutual funds, and fees and commission income. Total expenses were reduced due to one-time setup costs in the previous quarter. The company's strategic focus is on building a comprehensive product portfolio across financial services segments, leveraging technology, and optimizing cost-to-income ratios. The company aims to enhance accessibility, affordability, and financial literacy through customer-centric solutions.
🤝 Closing Remarks and Future Outlook
The closing remarks express appreciation for the continued interest and support of shareholders and colleagues. The company is navigating opportunities for growth and value creation in its businesses. The detailed earnings presentation is available on the company's website, and the call concludes with an invitation to explore it for further insights into the company's performance and future plans.
Mindmap
Keywords
💡Investor Relations
💡Financial Services
💡Digital Transformation
💡Regulatory Compliance
💡Strategic Oversight
💡Shareholder Approval
💡Operating Lease
💡Payment Solutions
💡Insurance Broking
💡Asset Management
💡Financial Performance
Highlights
Jill Devi Prasad, Head of Investor Relations for Geo Financial Services, welcomes participants to the virtual meeting discussing Q1 results.
MD and CEO Mr. Hes SAA and Group CFO Mr. Abishek join the call to discuss business details.
Geo Financial Services has been working on governance, policy framework, talent integration, and technology architecture.
Launch of the Geof Finance app in beta version on iOS and Play Store consolidates JFS group offerings.
Achievement of half a million downloads for the Geof Finance app.
Introduction of secured lending with Loan Against Mutual Fund and Home Loans in beta mode.
99.9% shareholder approval for postal ballot resolutions, enabling the commencement of the operating lease business.
Final approval from the Reserve Bank of India for converting Geo Financial Services into a Core Investment Company.
Unified app features include UPI, digital bank account, auto insurance, and loan against mutual funds.
Geo Finance Limited positions itself to capitalize on lending market opportunities with new product launches.
Geo Payment Bank's digital savings account has over a million active customers.
Geo Payment Solutions Limited offers payment aggregation with embedded payments and tailored POS solutions.
Geo Insurance Broking Limited aims to be a key player in insurance by leveraging digital distribution channels.
Asset Management Company in partnership with Black Rock focuses on integrating advanced technology for superior services.
JFS's strategic focus includes building a comprehensive product portfolio and leveraging the group's internal ecosystem.
The company's commitment to four core business principles: reputation, regulatory compliance, return of capital, and return on capital.
Consolidated profit after tax stood at 313 CR, with a total income of 418 CR for Q1 FY25.
Standalone profit after tax for the company was 72 CR, with total income at 134 CR for Q1 FY25.
JFL's focus on expanding digital footprint and optimizing process efficiency through innovation.
Transcripts
good evening everyone my name is Jill
Devi Prasad and I'm the head of investor
relations for geo Financial Services
Limited on the Declaration of the
results for the first quarter ended June
30th 2024 for fi
242 it gives me immense pleasure to
welcome the analysts investors and our
colleagues to this virtual meeting we
have with us today our MD and CEO Mr hes
SAA and our group Chief Financial
Officer m abishek p in this call all
participants will be in a listen only
mode the earnings presentation is
uploaded on our website
estimates or other words of similar
meaning all statements that address
expectations or predictions about the
future including but not limited to
statements about strategy for growth
product development Market position are
forward looking statements based on
rationale and data actual results May
Vary materially given Market
circumstances I will now hand over the
call to hes to discuss the business in
detail thank you Jill good evening
evening and a warm welcome to all
joining this call today we are delighted
to discuss the exciting developments of
the first quarter of fi
2425 in the backdrop of what continues
to be a robust economic growth and a
positive outlook for our
country over the last three full
quarters of uh Geo Financial Services as
a listed
company uh we made
we've been working on multiple fronts
importantly setting the governance and
policy framework in line with the
highest regulatory standards hiring and
integrating the right Talent at all
levels across all our operating entities
and setting a modern fit for purpose
cost effective technology and data
architecture to enable product launches
at PACE and distribution at scale while
strengthening these pillars will
continue to be an ongoing Journey I'm
happy to note that on the back of these
foundational blocks that have been
established we have reached certain
critical milestones in q1 of fi
2025 key key amongst these Milestones
was the launch of the geof finance app
in a beta version on May 30th
2024 on the iOS and Play Store this app
consolidates the offerings of the JFS
group setting a digital simple and
unified platform to distribute our
products to the consumers this consumer
app is in addition to the merchant app
which was launched in December
2023 with both these apps in place we
believe now we have created a vital
digital channel to reach our Target
customers I'm happy to update that as on
date we have approximately half a
million
downloads in addition to the app launch
as mentioned in our earlier calls we
have also been working towards
accelerating our secured lending
proposition and to this effect we have
launched loan against mutual fund for
our customers from our
nbfc we have also launched Home Loans in
a beta mode which will be generally
available to our consumers in due
course thanks to the overwhelming
approval from our esteemed shareholders
on our postal ballot for the related
party trans transactions we were able to
commence our operating lease business
with air fiber
devices on our payments Bank the digital
reamp undertaken over the last quarters
has led to over a million Kasa accounts
in the bank underscoring our commitment
to provide simple and robust digital
banking
Solutions before we move to each of the
businesses I would like to mention two
more points firstly I would like to to
express our deepest gratitude to our
shareholders who have voted on our
postal ballot resolutions I very pleased
to announce that
99.9% of our shareholders have voted in
favor of our postal ballot notice dated
May 23
2024 demonstrating strong shareholder
confidence in our
initiatives amongst other items as
mentioned earlier this shareholder
approval has indeed enable AED us to
commence the operating lease business in
the first quarter of this financial year
second and very importantly we have also
received the final approval from The
Reserve Bank of India on our application
for converting geof financial services
from an nbfc to a core Investment
Company or a cic this completes a very
important milestone for JFL from a
regulatory
perspective before we get to the various
businesses a quick overview about our
unified app this app has various payment
features including UPI a digital bank
account where the account opening can be
done end to endend online in just a few
minutes an auto insurance offering from
our partner insurance companies and Loan
against mutual funds from our nbfc this
app is modular and parts or whole of the
app can be embedded in other apps such
as my geio app to offer an embedded
experience to our
customers we will continue to expand our
product Suite in the coming quarters
with a few more launches across all our
business verticals the bank the nbfc and
the Insurance Solutions and also build
interesting engagement layers to keep
our customers experience Best in Class
while Evol while solving for their fin
itial
needs in line with our philosophy of
being customer first we have launched
the app in a beta version and will
evolve the app into a world-class
offering with active participation and
support of our
customers turning to our subsidiaries
and starting with Geo Finance limited
our non-banking financial entity has
strategically positioned itself to
capitalize on opportunities in The
Lending Market recently we successfully
launched loan against mutual funds
following an extensive beta testing
phase this is now available to our
consumers on our JFS
app in parallel the vendor financing
business which was kickstarted earlier
continues to add customers which fit our
risk and return criteria in this quarter
we've also introduced Enterprise
solutions for providing device Finance
solution Solutions to the employees of
our customers we are progressing with
Home Loans which is currently in a
sandbox and slated for Consumer launch
post our beta phase moving forward our
Focus remains on expanding secured
lending products such as loan against
Securities and Loan against property in
all the areas we will leverage the vast
ecosystem in which we operate certain on
an arms link basis and within risk and
Regulatory card
rates during the last quarter and as
mentioned earlier thanks to the approval
from our esteem shareholders on the
postal ballot we have kickstarted the
operating lease business with air fiber
devices this an Innovative solution is
actually an integrated offering for our
customers with a single interface across
device charges connectivity
and content this not only enhances
convenience but also expands
affordability for our
customers for go leasing Services
Limited or JSL this gives us access to
potentially a large customer base at low
acquisition and collection cost while at
the same time mitigating risks given
that asset ownership is with our Leasing
Company the necessary leadership
management and teex stack have all been
put in place to scale this
business additionally JSL also has a
50/50 JV with Reliance strategic
business Ventures Limited in the gift
City uh and this entity is called
Reliance International leing ifsc
Limited this entity was formed with an
intent to undertake leasing in the if
the International Financial Service
Center in gift City this gift City JB
has already initiated the operations of
ship leing in q1 of fi
2025 with the revamp text tag the geop
payment bank is now able to open a
digital savings account for its
customers online only in a few minutes
the bank also offers a virtual rupe
Platinum debit
card this digital savings account uh
though in its very nent phase has
garnered over a million active customers
till date and the customer value
proposition is as follows proliferation
of UPI as we all know as the dominant
payment method in daily use has now
indeed created the need for a second
daily expense account which in turn
helps customers declutter their primary
bank account our product road map for
the payment bank here includes
interesting variance of the savings
account and physical debit cards in the
near
future in addition to our digital
distribution which I spoke about JP has
also been working towards expanding its
physical distribution Network through a
network of business correspondents to
this effect the geop payments bank has
received approval from The Reserve Bank
of India to expand its Network by about
16,000 business correspondent Outlets
this roller
will be undertaken in a faced manner by
leveraging the vast distribution network
of our
ecosystem these Outlets will primarily
facilitate three things in the first
phase an assisted account opening Adar
enabled payment service and domestic
money
transfers this physical Channel We
Believe will serve a complimentary
Target customer segment compared to the
digital channel which I spoke about
earlier
Geo Payment Solutions limited our
payment Service Company is a payment
aggregation platform that aims to
specialize in comprehensive solutions
for Enterprise and delivery Merchants
our services include QR codes and point
of sale devices integrated with payment
Gateway supporting over 100 plus payment
options key Innovations here include
embedded payments enabling UPI Solutions
on existing point of sale devices used
by large Merchants which can further
enhance Sous customer
experiences we have also piloted
tailored point of sale Solutions such as
pin PA for Home Delivery Service
Merchants ensuring secure Payment
Processing further the geob Barat phone
also facilitates peer-to-peer Merchant
onboarding for or msmes and unorganized
retail empowering the small businesses
across the country with seamless Payment
Solutions our affordability Suite will
offer brand Emi for white goods thereby
expanding accessibility and promoting
affordability through these initiatives
uh JPS SL drives operational
efficiencies and delivers targeted
insights across its customer segments
and this we believe will be reflected in
the growing net margin of our
business moving on to our insurance
subsidiary at Geo Insurance broking
limited we aim to establish ourselves as
a key player by leveraging digital
distribution channels our diverse
portfolio today includes life non-life
auto and health insurance products from
over 30 insurance companies catering
comprehensively to the varying customer
needs in the last few months we have
worked towards obtaining necessary
regulatory approvals from the insurance
regulator Ira to sell insurance policies
online in parallel we have also
established a modern fit for purpose
technology stack essentially to create a
two-sided platform at one end we will
now have the capability to tie up with
our Insurance Partners digitally and at
the other end we are able to offer to
our customers a choice of insurance
policies best suited for their needs our
first offerings on the app is in the
category of auto insurance in the coming
months we will be able to expand this
offering across both the dimensions I
increase the number of insurance
companies and the number of products to
offer a full range of policies to our
customers given our modular technology
architecture across the app we will now
have the capability to embed Insurance
digitally in a customer's Journey which
will not necessarily be in our app
couple of examples of embedded Insurance
offerings are in Reliance Digital and
Metro Cash and Carry where extended
warranty and shopkeeper insurance policy
respectively are optionally en enbl to
cater to the customers requirement in
the core underlying Commerce
transaction in addition to laying the
foundation for digital channels we have
also launched an Institutional sales
channel to strengthen our Market
presence shifting years our asset
management company in partnership with
black rock has made significant strikes
we have identified top talent and are
focused on integrating Advanced Tech
technology platform solutions to deliver
Superior Asset Management Services our
process with the regulator for the
necessary approvals is well
underway I take this opportunity to
extend my heartfelt appreciation to all
our colleagues at geof Financial
Services across our subsidiaries and
partner companies whose unwavering
commitment has been instrumental in
building and fortifying our business
foundations additionally I also express
our very sincere gratitude to our
shareholders for their steadfast support
and confidence as we advance our mission
to democratize financial services Across
the Nation now I would like to invite Mr
abishek Pak our group CFO to provide a
comprehensive overview of our financial
performance abishek over to
you thank you hes uh good evening
everyone
I'm pleased to present the financial
highlights for the first quarter ended
June 30th 2024 for financial year fi2
2425 our financial results for this
period are prepared in compliance with
Indian accounting standards as
prescribed by the ministry of corporate
Affairs as indicated earlier by Hesh on
July 11th 2024 we received the RBI
approval for conversion to a key to a
cic a key milestone in our journey this
conversion will allow us to maintain
strategic oversight across our
businesses leading to better synergies
improved resource allocation and
enhanced group
performance during the past year a
strong Foundation has been laid and
business teams are in place for each of
our businesses the legal entities are
managed by independent boards with a
robust governance structure as part of
the governance framework the company has
established comprehensive group level
compliance audit and risk functions for
Effective oversight and
monitoring during the quarter green
shoots were observed in each of our
businesses setting the stage for
business
growth our operating lease business
entity JSL began its operations post
receipt of rated party approval from its
shareholders similarly r i our entity
established in GIF City sez has also
commenced operations with ship leasing
transactions coming back to our
presentation JFL aims to holistically
address the four core needs of our
customers borrowing transacting
investing and protecting through its
wide array of financial services the
company is a holding company and
consolidates the results of its various
businesses this includes the consumer
facing entities namely Gio Finance
limited Geo Insurance broking limited GE
Payment Solutions limmited goo payments
Bank are JV with State Bank of India
gooing Services Limited further the
Consolidated financial statements also
include the results of three more
entities Reliance Industrial Investments
and Holdings Limited which is an
investment holding company accounted for
on a fully Consolidated
basis Reliance services and Holdings
Limited which has been accounted for a
for as an associate and Reliance
International leasing ifsc limited our
entity in GIF city scz which has been
accounted for as a joint venture in
accordance with indas
110 moving on to the financial
performance for q1
fi25 our Consolidated profit after tax
stood at rupees 313 CR as compared to
rupes 311 CR for Q4 FY
24 the total income for the quarter was
rupees 418
CR this amount was similar to the
previous quarter that is Q4
f524 the total income is represented
by interest income on interest bearing
Investments predominantly income from
your treasury book net gain on Fair
Value changes on money market and liquid
mutual funds and fees and commission
income on the treasury income High
yielding fixed deposits matured in this
quarter and the proceeds of which were
reinvested in money market and Li liquid
mutual fund Investments this was done to
ensure that liquidity was available at
all times given the evolving business
needs therefore there was a reduction in
treasury income
and a corresponding increase in net gain
on Fair Value changes resulting in a
treasury increase of R 380 cres as
compared to rupees 388 crores in the
previous quarter that is Q4
f524 the reduction of 8 crores between
q1
F525 and Q4
f524 is broadly due to fall in ELD in
the treasury book and the overall
increase in the average treasury book
size during the quarter this was offset
by an increase in Insurance Brokerage
commission classified under fees and
commission
income total expense for q1
fi25 was rupes 79 crores as compared to
rupees 103 CR in Q4 FY
24 decrease in total expenses can be
attributable to expenses incurred in Q4
f524 which were done on account of
setting up new
businesses going forward the Standalone
profit after tax for the company for q1
F525 was rupees 72 cres as compared to
rupees 78 cres for Q4
f524 the total income for this quarter
was rupees
134 CR compared to rupees 141 CR in Q4
f524 as indicated earlier the total
income is represented by interest income
on interest bearing Investments net gain
on Fair Value changes on money market
and liquid mutual fund Investments and
fees and commission income the total
expenses for q1
fi25 was rupees 36 crores as compared to
R 37 cror in Q in Q4
f524 of the total expenses of rupes 36
crores rupees 6 crores pertains to
provision recognized on standard asset
on Intergroup
loans there has been decrease in other
operating expenses which can be
attributable to one-time expenses
incurred in Q4 f524 on account of new
businesses
setup our Endeavor is to optimize cost
to income ratios across entities by
leveraging technology and efficient use
of
resources lastly before I conclude I
would like to reate our guiding
principles our commitment to the four
Core Business principles remains
unwavering prioritizing between
reputation above all adherance to
regulatory compliances return of capital
and return on
Capital JFS sl's strategic focus is on
building a comprehensive product
portfolio across promising Financial
Services segments furthermore the
company's direct to Consumer approach
aims to Leverage The group's internal
ecosystem to drive low acquisition cost
born in the new digital era JFL is
uniquely positioned to leverage emerging
Technologies and drive innovation in the
financial services sector looking ahead
the company Focus remains on expanding
its digital footprint and ow and and
empowering its digital infrastructure to
optimize process and Elevate
efficiency we are dedicated to enhancing
accessibility affordability financial
literacy and prosperity for all our
customers simplifying Financial Services
through Innovation and customer Centric
Solutions we appreciate your continued
interest and support as we navigate
opportunities for growth and value
Creation in each of our businesses with
this I would like to hand over the call
to Jill thank thank you so much for your
time thank you hites and abishek and
thank you everyone for joining this call
as we conclude our earnings call we
invite you to explore the detailed
earnings presentation available on our
website and the stock exchanges have a
good evening
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