Jio Financial Services Shares Rise After Motilal Oswal Initiates Coverage With Buy Rating
Brokerage Sees Over 35% Upside Potential
Shares of Jio Financial Services Ltd. moved higher on Wednesday, March 11, after brokerage firm Motilal Oswal initiated coverage on the stock with a bullish outlook, projecting a 35.2% upside from its previous closing price.The brokerage started coverage with a Buy rating and set a target price of ₹320 per share, marking the second analyst initiation on the stock.
Vision of a Next-Generation Financial Services Platform
According to Motilal Oswal, Jio Financial Services is being structured as a next-generation financial services platform in India, with a presence across multiple segments of the financial ecosystem.The company is targeting operations in areas such as:
- Lending
- Payments
- Asset management
- Wealth management
- Insurance manufacturing and broking
- Digital financial services
Ecosystem Advantage Through Jio and Reliance Network
Motilal Oswal’s investment thesis for Jio Financial Services centers on its ecosystem-driven operating advantage.The brokerage noted that the company benefits from access to Jio’s subscriber base of more than 500 million users, along with the extensive retail network of the Reliance Group. This integrated ecosystem allows Jio Financial Services to reach customers through established digital and physical channels.
Unlike traditional non-banking financial companies that typically incur high customer acquisition costs, the company can enter the daily digital ecosystem of a large portion of India’s population at a relatively lower cost.
Profitability Expected to Improve Over Time
Motilal Oswal indicated that near-term profitability may remain modest, as several business verticals are still in the incubation phase.However, the brokerage noted that the company has already built foundational capabilities across technology infrastructure, strategic partnerships, and distribution networks, positioning it for scalable growth in the medium to long term.
The brokerage expects Jio Financial Services’ consolidated Profit After Tax to grow at a compound annual growth rate of 48% between financial years 2026 and 2028.
According to the brokerage, while current valuations already reflect part of the medium-term growth story, they do not fully capture the scale opportunity across lending, asset management, wealth management, and digital financial services as these segments transition toward meaningful profitability.
Stock Performance
At around 9:30 a.m. on Wednesday, shares of Jio Financial Services were trading 1.3% higher at ₹239 apiece.Despite the intraday gain, the stock has declined 11.3% over the past month.
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The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
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