By Rama Venkat
BENGALURU (Reuters) -Shares of India’s Jio Financial Services (JFS) dropped more than 5% on Tuesday, a day after the company said its third-quarter profit more than halved sequentially, while some investors booked gains following a recent rally.
JFS’ shares were down 5.3% in afternoon trade on Tuesday, on track for their worst one-day decline since their trading debut in August last year. The stock had climbed 10.7% in the previous three sessions.
“The drop is mainly attributed to the perception of retail investors who normally go by reported profit changes,” said G Chokkalingam, founder and managing director of Equinomics Research.
“The stock has also recovered from the bottom in the last few months and hence, some traders could be booking some profits,” Chokkalingam added.
JFS’s consolidated profit after tax dropped 56% in the third quarter to 2.94 billion rupees ($35.4 million), from the second quarter.
Billionaire Mukesh Ambani carved out JFS from his conglomerate Reliance Industries to tap into the financial services market in India after similar disruptive forays into the telecom and retail sectors.
JFS said in a post-earnings call that it planned to launch secured loan products and it partnered with three more insurers last quarter, taking its total tie-ups to 27 across general and life insurers, per analysts.
“JFS will focus on secured loan products with the launch of DaaS, or device-as-a-service, which involves leasing airfiber, phones and laptops along with supply chain financing, loan against shares, and home loans,” Jefferies said in a note.
Shares of Reliance, whose operations span from telecom to retail to oil, were off 0.2% on the day. ($1 = 82.9690 Indian rupees)
(Reporting by Rama Venkat in Bengaluru; Editing by Sohini Goswami and Savio D’Souza)