Posted on March 3, 2025, by Niftynews
Jio Financial shares have taken a significant hit, slipping below the key psychological level of ₹200 in Monday’s trade. The stock tumbled by 4.38%, hitting an all-time low of ₹198.60. Currently, it is trading at ₹201.05, reflecting a 33.97% decline on a year-to-date (YTD) basis. Investors are now grappling with whether it is the right time to add this stock to their portfolio or wait for further clarity.
Jio Financial Services’ Decline: The Latest Price Action
The dramatic decline of Jio Financial shares comes amid a broader market correction and company-specific challenges. At its low of ₹198.60, the stock is trading at a significant discount compared to its previous highs. The slump has caught the attention of both investors and analysts, as they weigh the technical and fundamental outlook for the stock.
Jio Financial’s Performance in Q3 FY25
Despite the fall in share price, Jio Financial Services posted a marginal 0.32% increase in its consolidated net profit for the December 2024 quarter. Profit stood at ₹294.78 crore, compared to ₹293.82 crore in the corresponding period of the previous year. Furthermore, revenue from operations grew by 5.98%, reaching ₹438.35 crore in Q3 FY25, compared to ₹413.61 crore in Q3 FY24.
While these results show slight positive growth, the market’s reaction has been more focused on the overall decline in stock price rather than the incremental earnings growth.
Bearish but Oversold: Jio Financial’s Technical Outlook
From a technical standpoint, Jio Financial shares look “bearish but oversold” on the daily charts. The stock has been trending lower, showing lower lows and lower highs, signaling a continued downward trend. Despite this, the Relative Strength Index (RSI) for Jio Financial is at 25.02, which is below the 30 threshold, indicating that the stock is in oversold territory. Typically, stocks in this zone can either continue their decline or see a potential reversal if market conditions change.
Support and Resistance Levels for Jio Financial Shares
The key support for Jio Financial shares is seen around the ₹190-₹184 range. If the stock breaks below this support level, it could signal further downside. However, if it finds support at these levels, a potential rebound could follow.
On the upside, ₹210 remains a significant resistance level. A decisive move above ₹210 could trigger an upside rally, with analysts expecting the stock to potentially reach ₹225. In the medium term, Jio Financial’s price range is expected to be between ₹190 and ₹225.
Experts’ Views on Jio Financial: Time to Buy or Avoid?
- Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, advises that long-term investors could consider adding Jio Financial’s stock on dips, particularly due to the company’s entry into financial services, stock broking, and asset management sectors. However, for those with a short- to medium-term view, it is advisable to avoid the stock at current levels until more clarity emerges.
- Osho Krishan, Senior Research Analyst at Angel One, echoes a similar sentiment, noting that the stock remains in a bearish trend with no immediate signs of recovery. He advises that Jio Financial shares could face continued downside unless the price manages to break resistance levels.
- Jigar S Patel, Senior Manager at Anand Rathi, believes that Jio Financial shares will face immediate resistance at ₹210. A decisive move above this level could trigger an upward shift to ₹225. He also suggests that the stock could see continued weakness if it fails to hold ₹190 support.
- AR Ramachandran, a SEBI-registered research analyst, agrees that the stock is oversold but recommends buying only if Jio Financial closes above the ₹206 resistance level. If the stock manages to close above this mark, a potential upside to ₹237 could be expected in the near term.
Valuation Metrics: Is Jio Financial a Good Buy?
The current price-to-equity (P/E) ratio of Jio Financial stands at 249.19, which indicates that the stock is highly overvalued compared to its earnings. Its price-to-book (P/B) value is 5.32, reflecting a relatively high valuation, which could be a cause for concern for many investors looking for undervalued opportunities.
Additionally, the Earnings Per Share (EPS) of Jio Financial stands at ₹0.83, with a Return on Equity (RoE) of 2.13%. These metrics highlight that, despite its high market valuation, the company’s profitability and return on equity are not very strong.
Promoter Stake in Jio Financial Services
As of December 2024, the promoters held 47.12% of Jio Financial Services. While this indicates strong backing from the founding group, it also means that the company’s public float is relatively low. This low public float can sometimes result in higher volatility in the stock, especially during periods of market uncertainty.
Conclusion: Is It Time to Add Jio Financial Shares to Your Portfolio?
Given the current oversold conditions and bearish trend, Jio Financial shares are in a precarious position. Long-term investors may find value at these low levels, particularly due to the company’s expansion into financial services, stock broking, and asset management. However, for those with a more short-term or medium-term investment horizon, caution is advised until the stock shows signs of stabilization and breaks key resistance levels.
Key Takeaways:
- Jio Financial shares are at an all-time low, with a 33.97% YTD decline.
- The stock is oversold with RSI at 25.02, suggesting potential for a reversal if market conditions improve.
- Support levels are seen at ₹190-₹184, while resistance is at ₹210 and ₹225.
- Investors should carefully monitor technical levels and market conditions before making any decisions to buy or sell Jio Financial shares.
