JM Financial Ltd. hopes to generate 50% of its revenue online within the next eight years.
Nimesh Kampani, a renowned veteran of the investment banking industry, created JM Financial Ltd., which turns 50 this year. Since 1973, the company has expanded into several industries, including mortgage lending, asset management, distressed debt, and private equity, growing into a sizable conglomerate in the financial services industry.
The group’s ambitions, particularly it’s initiative to develop a solid digital platform that will be the company’s main source of revenue, are discussed in an interview with Vishal Kampani, non-executive vice chairman.
JM Financial will reach 50 this year. How well-positioned is the company today for growth?
Well, it has been a process of long-term value development built on solid fundamentals, and it is how we become a diversified financial services company. Right now, our investment banking, mortgage lending, asset management, wealth management, and securities (AWS) businesses are seeing strong growth momentum and activity.
Last year, on the strength of our firm, resolves, our alternative and distressed credit businesses generated record profitability. We still place a high priority on resolving existing assets. Our asset reconstruction industry will prosper as banks and other financial institutions continue to straighten out their balance books.
As part of our ongoing efforts to seize the multi-decade potential before us, we are also spending heavily, particularly on infrastructure, technology, and people. For the economy, it’s a fascinating time. Companies now face growth obstacles after firmly putting the epidemic and other difficulties in the past.
Emerging potential in the current stage of our journey can be found in the financial markets and real estate, two areas where banks are traditionally restricted. At JM Financial, our emphasis is on capital markets and real estate.
In the lending and advisory industries, we see tremendous development potential. Over the coming ten years, real estate and capital markets are anticipated to expand faster than the GDP. In actuality, these industries will become the main forces behind economic expansion.
What outcomes do you anticipate for the Indian economy, given the current macroeconomic climate? Can India benefit from the changes in the global economy?
This is India’s decade, in our opinion. Corporations are in good shape due to strong gross domestic savings and a lower ratio of corporate debt to GDP. The banking and non-banking systems are well-capitalized, and credit growth is robust, provided that cleanup efforts are continued. Given that the domestic market is expanding more quickly than other emerging markets, I anticipate a pick-up in corporate investment cycles.
Due to demographic dividends and the government’s emphasis on bolstering the infrastructure for transportation, communication, the digital economy, and logistics, industries including manufacturing and defence anticipate a significant increase in exports. However, given the exceptionally positive prognosis overall, growth momentum won’t be restricted to a single industry. Taking into account market and interest rate fluctuations, the economy is firmly on a growth track in the medium- to long term.
How does JM Financial plan to seize this chance?
All of our businesses are now firmly focused on achieving sustainable growth. We strategically invested in product development for our investment bank business to strengthen our product pipeline. As part of our effort to diversify our revenue generation strategy—which is not conditional on a single sizable client and is instead widely dispersed—we have increased the number of customers we serve.
Our diversified product portfolio, made possible by our strong product development strategy, consists of financial solutions for NBFCs, securitization, co-lending models, etc., as well as debt capital markets instruments of investment grade, structured and tailored financing and wealth management solutions for our ultra-high-net-worth clients.
We want to work with NBFCs that have solid credit profits and stable growth prospects so that we can complement one another’s benefits. A disciplined approach has helped the investment bank business operate efficiently, growing the company’s clientele by bringing on several corporates and institutions and delving deeper into different product offerings.
JM Financial suggests purchasing one large-cap and one mid-cap chemical stock to increase earnings.
According to JM Financial, a trading and research group, contractual companies have great volume off-take visibility despite Europe’s weakening demand and rising energy prices. If any offtake slowdown in the following quarters may be reversed Since SRF and Navin are the brokerage firm’s selected contractual participants for large- and mid-cap equities, respectively.
While contracted players like Navin Fluorine and Anupam Rasayan are expected to report sequential solid sales, the brokerage expects that, except contracted players, the prevalence of chemical companies it covers is likely to show weak sequential sales growth (or even contraction in some cases).
Most of the companies we cover should see a sequential margin improvement due to the decline in essential chemical players. Additionally, it stated that beginning in the 4QFY23, the restoration of the export incentives scheme should increase the margin for all chemical companies.
“While SRF should continue to sell fluoro speciality chemicals at a strong growth rate, we expect they will sell less refrigerant gas sequentially. The note states that Navin Fluorine will benefit from an aggressive ramp-up of HPP and speciality chemicals contracts.
Due to the seasonality balancing decline in the CSM industry, PI’s domestic business will perform strongly. Amid a surge in innovative items, Clean Science will profit from price increases. Since they guarantee substantial volume growth and margin pass-through, the brokerage continues to favour contractual players (with a certain lag in some cases). SRF in large caps and Navin Fluorine in midcaps are its top stock recommendations in the chemicals sector.
edited and proofread by nikita sharma