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Motilal Oswal Financial Services reports highest ever PAT of Rs 536 cr, +81% YoY in Q2FY22 and Rs 758 cr, +63% YoY in H1FY22.

Mumbai 28-Oct-2021


Motilal Oswal Financial Services reports highest ever PAT of Rs 536 cr, +81% YoY inQ2FY22 and Rs 758 cr, +63% YoY in H1FY22.


Mumbai, October 28, 2021: Motilal Oswal Financial Services Ltd. announced itsresults for the quarter and half year ended September 30, 2021 post approval bythe Board of Directors at a meeting held in Mumbai on October 28, 2021.


Performance for the quarterand half year ended September 30, 2021:

  • In Q2FY22, consolidated revenues grew by 46% YoY at Rs 1,094 cr, Consolidated PAT grew by 81% YoY to Rs 536 cr including gains on investments (Rs 267 cr). Operating profit (excluding gains on investments) for the quarter was highest ever at Rs 269 cr, +118% YoY.
  • In H1FY22, Consolidated revenues grew by 42% YoY at Rs 1,953 cr, consolidated PAT grew by 63% YoY at Rs 758 cr. Operating profit for the half year was highest ever at Rs 398 cr, +76% YoY.
  • Core business fired all cylinders – Capital market business PAT + 52% YoY and Asset & Wealth +226% led by +44% AMC, +88% Wealth Management and 12x growth in Private Equity business driven by strong profit on exit of investment. Further, we have witnessed turnaround in Housing finance business.


Key highlights for the H1FY22

  • Most of our businesses have delivered strong and sustainable performance in Q2FY22 and H1FY22.
  • Our Asset under Advisory (AUA) stood at Rs 2.9 tn led by all-time high AUM across AMC, Wealth and Distribution businesses.
  • Our organizational talent has reached over 8,600 serving over 3.4 mn clients.
  • Our Net worth has crossed Rs 5,000 cr mark.
  • Capital Markets – Highest ever broking revenue and profit in Q2 & H1FY22, growth in client addition led by traction in digital acquisition channel, 96% growth in ADTO, 70 bps QoQ rise in cash market share, strong growth in active clients, Investment banking participated in 3 IPOs and 1 OFS.
  • Asset Management– Highest ever AUM, gross & net sales gaining traction, strong response to AIFs offerings, increase in SIP addition, continued traction in our international passive offerings. IREF V has achieved its 2nd close at Rs 810 cr. Launch of largest ever PE growth IBEF-IV fund with target size of Rs 4,000 cr.
  • Home Finance – India Ratings assigned IND AA rating, outlook upgraded by CRISIL to AA-/ Positive and rating upgraded by ICRA to ICRA AA-/stable, Strong pick-up in disbursements, traction in login/sanction pipeline, expansion in sales force and sharp reduction in cost of funds driving margin expansion.
  • Consolidated net worth is at all-time high at Rs 5,168 cr, net debt is Rs 4,050 cr. Excluding Home finance, net debt is Rs 1,708 cr. Total D/E declined to 0.9x. Ex-MOHF D/E stood at 0.5x. Net of investments, we have a net cash balance sheet. RoE for Q2FY22 stands at 37%.
  • Besides financial performance, recent time has been very eventful in terms of our successes in brand building, advertising and several other fronts. MOFSL rank 1stBest Local Brokerage” in Asia Money broker’s poll 2020. MOFSL once again recognized as a “Great Place to Work” - India certified organization, Motilal Oswal Wins “Best PMS in 10 years performance” across all categories at India’s Smart Money Manager Awards - 2021. Motilal Oswal Private Equity has been awarded as "Growth Capital Investor of the Decade" at the Venture Intelligence APEX PE-VC Awards. Our latest Ad on “Skin in the Game” has received appreciation in various media. These and several other recognitions of Motilal Oswal as a preferred consumer and employee brand in financial services space.


Speaking on the performance of thecompany, Mr. Motilal Oswal, MD & CEO said “All of our businesses has deliveredstrong & sustainable performance in H1FY22. Last financial year was alandmark year for us with highest ever revenues and profits. This yearalso we are witnessing similar trend and we delivered highest ever quarterly &half yearly operating profit. Our retail broking business which is our cash cowbusiness has achieved new highs on various parameters and benefitting from marketexpansion and industry consolidation with its knowledge driven phygitalofferings. Our Institutional Broking business has been ranked #1 as local brokeragehouse in Asiamoney poll 2020. Our strategy to invest business profits in ourown equity investment products has registered highest ever profits and asresult our Net worth has touched new high. Moreover, our strategy to diversifyour business model towards linear sources of earnings continues to deliver results.Our Asset Management business is likely to gain from process driven investingand its niche offerings. Our Housing finance business is geared up forprofitable growth. Each of our 7 businesses offers headroom for growth. “


Performance of Business Segments for the quarter and half year ended September 30, 2021


·     Capital markets Businesses (Broking & Investment banking)

o  Capital markets comprises of Retail Broking, Institutional Equities andInvestment Banking business. Revenues for this segment were Rs 608 cr, +44% YoYin Q2FY22 and Rs 1,122 cr, +46% YoY in H1FY22. Capital market businesses have contributed ~48% of consolidatedrevenues.

o  Profit grew by 52% YoY / 55% QoQ at Rs 121 cr in Q2FY22 and 46% YoY to Rs200 cr in H1FY22 led by healthy volume growth of 96%YoY.

o  In Retail Broking & Distribution, we have witnessedstrong traction in new client addition driven by Franchisee and retail channel,total ~440,000 clients acquired in H1FY22, +114% YoY. NSE active clients havealso registered 62% YoY growth at 7.2 lacs as of Sept 2021.

o  Our strategy to bring inlinearity through the trail-based distribution business is showing results.Distribution AUM grew by 43% YoY at Rs 15,918 cr as of Q2FY22. With only 13% ofthe ~2.4 million client base tapped, we expect a continued increase in AUM andfee income as number of clients to whom we have cross sold and number ofproducts per client cross sold rises.

o  In Institutional Broking, team wins big in Asiamoney poll 2020.Ranked #1 Best local brokerage House, Best research team, Best sales and salestrading and Best Corporate access. Strong improvement in domestic clientrankings with top 3 rank retained in most clients. This has been the result offocus driven differentiated research products with 250+ companies covering 21sectors.

o  Investment Banking business has participated in 3IPOs and 1 OFS. Further, there is a strong pipeline of signed IPO mandates which willstart entering the markets from H2FY22 onwards, as a result revenue tractioncan be witnessed in coming quarters.


·     Asset Management businesses (AMC, PE and PWM)

o  Asset Management business AUM across MF, PMS &AIF stood at Rs 49,563 cr, +32% YoY. Strong growth of 44% YoY in PAT at Rs 42 crin Q2FY22 and 46% YoY at Rs 77 cr in H1FY22.

o  Equity MF AUM touched Rs 300 bn i.e. 1.5% of the Industry MF Equity AUMof Rs 20 tn. We have seen improvement in performance of several products. Our Grosssales and Net sales started improving and redemption market share declined on asequential basis.

o  Favourable response to alternate offerings under AIF strategy andinternational passive offerings.

o  We have added around 220,000 SIPs in H1FY22, +62% YoY. New SIP countmarket share stood at 1.7% in H1FY22.

o  Our share of Alternate assets, comprising of PMS & AIF, is thehighest among AMC’s at ~38%.

o  Private Equity has committed investment AUMof Rs 6,882 cr across 3 growth capital PE funds and 5 real estate funds. In Q2FY22,revenues stood at Rs 151 cr and PAT stood at Rs 86 cr including profit on exitof investments of Rs 83 cr in Q2FY22. The 1st growth fund (IBEF 1)has delivered an XIRR of 26%+. Average IRR on exited investments in Real estatefunds is 21%+. IREF V achieved its 2nd close at Rs 8.1 bn. PEbiggest fund launched with IBEF IV with a target size of Rs 40 bn.

o  Wealth Management business AUM grew by 57% YoYat Rs 31,515 cr in Q2FY22. Wealth business revenue grew by 36% YoY to Rs 48 cr inQ2FY22 led by strong net sales at Rs 19.9 bn in Q2FY22. Yield improved by 7 bps QoQ to ~63bps. RM count of this business stood at 122. Our trail revenues predominantly cover ourfixed costs.  Strong operating leverageis visible led by improvement in RM productivity. We continue to invest in thisbusiness by adding RMs.

o  Overall Asset and Wealth Management revenues were Rs 346cr, +94% YoY in Q2FY22 and Rs 549 cr, +69% YoY in H1FY22. Asset & Wealthcontributes 23% of consolidated revenues. Profits were Rs 144 cr, +226% YoY inQ2FY22 and Rs 197 cr, +169% YoY in H1FY22 and contributed 25% of consolidatedprofits.


·     Housing finance business

o  Motilal Oswal Home Finance (MOHFL) reported profit of Rs 20 cr in Q2FY22,+253% YoY and Rs 29 cr in H1FY22, +70% YoY

o  NII grew by 16% YoY and NIM expanded to 6.9% in H1FY22.

o  Yield on Advances stood at 13.9% in H1FY22 while Cost of Funds was downby 110 bps YoY to 8.4%, resulting in expansion in Spread by 70 bps YoY to 5.5%. 

o   We have raised Rs 3.8bn in H1FY22 at an average cost of 7.07%.

o  Disbursements in H1FY22 stood at Rs 249 cr, +198% YoY. Business is gearedup for stronger growth in disbursements. Sales force expansion is currentlyunderway.

o  In Q2FY22 business has come back strongly led by revival in demand andcustomers confidence. Our collection efficiency in September has reached to~100% and with better resolutions we are able to bring down GNPA/NNPA to2.2%/1.4% respectively.

o  IND AA rating assignment by India Ratings, outlook upgrade by CRISIL toCRISIL AA-/Positive and rating upgrade by ICRA to ICRA AA-/stable, all restoresconfidence on company and acknowledge its initiatives taken to revive thebusiness.

o  Total capital infusion to Rs 8.5 bn. Net Gearing stands at 2.5x and Tier1 CAR remains robust at 48%.


·      Fund based investments includes sponsorcommitments to our AMC & PE funds and strategic equity investments.

o  Fund based investments have registered gains in a quarter of Rs 265 cr inQ2FY22, +54% YoY and Rs 357 cr in H1FY22, +18% YoY

o  Total quoted equity investment including unrealised gains was Rs 2,528 cras of H1FY22. Cumulative XIRRof these investments is ~19% (since inception).

o  Total equity investment including alternate funds was at Rs 3,614 cr asof Sep-21. XIRR of 33% on PE/RE investments.


About Motilal Oswal FinancialServices Limited

MOFSL is a financial services company. Its offeringsinclude capital markets businesses (Retail broking, Institutional broking &Investment banking), Asset & Wealth Management (Asset Management, Private Equity& Wealth Management), Housing Finance & Equity based treasuryinvestments. MOFSL won the ‘Brand of the Year’ award at the IBLA CNBC TV 18. MOFSL employs ~8600 employees serving to 3.4 mnclients via distribution reach in 700+ cities. MOFSL has AUA of Rs 2.9trillion.


For further details contact:

Mrs. Rohini Kute

(Head of Corporate Communication)

Motilal Oswal Financial Services

Mob- +91-9820196838

Mr. Shalibhadra Shah

(Chief Financial Officer)

Motilal Oswal Financial Services

Mob- +91-9819060032

Mr. Rakesh Shinde

(Head of Investor Relations)

Motilal Oswal Financial Services

Mob- +91-9920309311