INVESTOR UPDATE

Motilal Oswal Financial Services reports operating PAT of

Rs 619 cr for 9MFY23, +12 % YoY

Declares interim dividend of Rs 7 per share

Mumbai,January 24, 2023: Motilal Oswal Financial Services Ltd. announced its results for the quarter & nine months ended December 31, 2022 post approval by the Board of Directors at a meeting held in Mumbai on January 24, 2023.

  Performance for the quarter ended December 31, 2022:

• Consolidated revenue grew by 2% YoY/5% QoQ at Rs 1,146 cr for Q3FY23 and 8% YoY to Rs 3,200 cr for 9MFY23.
• Consolidated operating profit after tax for the quarter was Rs 217 cr and Rs 619 cr, up 12% YoY for 9MFY23.
• Capital market business PAT was up 2% QoQ at Rs 136 cr; Asset & Wealth businesses PAT stood at Rs 67 cr. Housing finance business profit grew by 93% YoY/9% QoQ to Rs 36 cr.
• Declared an interim dividend of Rs 7 per share

Speaking on the performance of the company, Mr. Motilal Oswal, MD & CEO said “We have delivered sustainable performance in Q3FY23 despite of market headwinds. Our retail broking business which is our cash cow business continued to improve its market share through digital initiatives and benefitting from market expansion and industry consolidation. We continue to focus on our strategy to diversify our businesses towards linear sources of earnings. Our Asset Management business has seen improvement in performance and is likely to gain from process driven investing and its niche offerings. Our Wealth Management business is on its way to achieve scale as we have strengthened our leadership team and hiring more RMs. Our PE business has successfully delivered on fund raise of its largest everfund. Our Housing finance business has witnessed turnaround by improving disbursements and profitability parameters and is now geared up for sustainablegrowth. There is immense potential and opportunities in the market for each of our businesses to flourish.”

Performance of Business Segments for the quarter ended December 31, 2022

·     Capital markets Businesses (Broking & Investmentbanking)

o        Capital markets comprise of Retail Broking and Distribution, Institutional Equities and Investment Banking business. Revenues for this segment were Rs 749 cr, +3% YoY/5%QoQ in Q3FY23 and Rs 2,069 cr, +12% YoY for 9MFY23.

o        Profit grew by 2% QoQ at Rs 136 crin Q3FY23 and Rs 359 cr, +3% YoY for 9MFY23.

o        In Retail Broking &Distribution, Retail F&O market share improved by 168 bps YoY/54 bpsQoQ. Overall ADTO grew 205% YoY / 32% QoQ

o        NSE active clients have registered 14% YoY growth at 9.0 lakhs as of December 2022. MOFSL’s ranksimproved to 9th position, in terms of active clients. Acquired 5,11,000 clientsin 9MFY23 with traction witnessed in online channel.

o        Distribution AUM grew by 17% YoY/4% QoQ at Rs 19,370 cr as of Q3FY23. Distribution Net Sales of Rs 780 cr during9MFY23.

o        Interest income increased by 27%QoQ to Rs 211 cr primarily due to 14% QoQ increase in MTF Funding book of Rs3,320 cr.

o        Currency market share improved by 300 bps QoQ to 15.0%. Commodity market share stood at 6.9%.

o        Launched Option StorePro for advance traders with features to create customise strategies.

o        Institutional Equities team wins big in Asia Money Brokers Poll 2022. Ranked #1 Corporate Access Team and #2 SalesTeam and Execution Team.

o         Investment Banking successfully completed 3 marquee deals withtotal fund raise of Rs 2,330 cr in 9MFY23. Further, there is a strong pipeline of signed IPO mandates which is expected to fructify innext quarter.

·     Asset & Wealth Management businesses (AMC, PE and PWM)

o                     Total Assets under management across AMC,Wealth & PE was Rs 97,300 cr with net yield of 74 bps for 9MFY23

o        Overall Asset and Wealth Management revenues were Rs 250 cr, +7% QoQ in Q3FY23 and Rs 702 cr +3% YoY for 9MFY23. Profits were Rs 67 cr in Q3FY23 and Rs 192 cr in 9MFY23.

o        Asset Management business AUM across MF, PMS & AIF stood at Rs 46,480 cr. Revenues for Q3FY23 stood at Rs 141 cr and Rs 424 cr for9MFY23.

o        MF AUM stood at Rs 29,530 cr. We have seen turn around in performance across active MF schemes which has led to improvement in grosssales and decline in redemptions.

o        Added around 66k new SIPs in Q3FY23, up 21%QoQ with strong traction witnessed in active funds.

o        Our share of Alternate assets, comprising ofPMS & AIF, is one of the highest among AMC’s at ~36%.

o        Private Equity business fee earning AUM of Rs 9,540 cr across3 growth capital PE funds and 4 real estate funds. In Q3FY23, revenues grew by57% YoY/30% QoQ at Rs 51 cr and Rs 122 cr, +46% YoY for 9MFY23. The 1st growth fund (IBEF 1) has delivered an XIRR of 26%+.

o        Wealth Management business AUM grew by 21% YoY/8% QOQ at Rs 41,300 cr as on December 31, 2022. Wealth business revenue grew by 13% QoQ toRs 58 cr in Q3FY23 and Rs 156 cr, +7% YoY for 9MFY23. Strong net sales of Rs 4,560cr in 9MFY23.

o        Bolstered its leadership team with senior management hiring to strengthen Ultra HNI offerings and advisory capabilities. Added net 27 RMs in last 12 months. We will continue to invest in this business by further RM additions.

·      Housing finance business

o        Motilal Oswal Home Finance (MOHFL) reported profit of Rs 36 cr in Q3FY23, +93% YoY/9% QoQ and Rs 102 cr, +115% YoY for9MFY23.

o        NII grew by 10% YoY and NIM expanded by 66bps YoY to reach 7.8% for 9MFY23.

o        Yield on Advances stood at 13.8% in 9MFY23while Cost of Funds was down by 40 bps YoY to 7.9%, resulting in expansion of spreadby 34 bps to 5.9%.

o        RPLR is increased by 50 bps with effect fromJanuary 1, 2023

o        Disbursements grew by 47% YoY to Rs 640 crin 9MFY23. Business is geared up for stronger growth in disbursements.

o        GNPA stood at 2% as of December 31, 2022 with collection efficiency of 100% during Q3FY23.

o        Net Gearing stands at 2.2x and Tier 1 CARremains robust at 45%.

·      Fund based investments includes sponsor commitments to our AMC, PE funds, RE funds and strategic equity investments.

o        Total investment including unrealised gains was Rs 4,720 cr as of December 31, 2022.

o        Total equity investment including alternate funds was at Rs 4,320 cr as of December 31, 2022. XIRR of21% on PE/RE investments.

o        Cumulative XIRRof ~17% on total investments (since inception).

About Motilal Oswal Financial Services Limited

MOFSLis a financial services company. Its offerings include capital marketsbusinesses (Retail broking, Institutional broking & Investment banking), Asset& Wealth Management (Asset Management, Private Equity & Wealth Management),Housing Finance & Equity based treasury investments. MOFSL employs 10,000+ employees serving to 53 lakh clients viadistribution reach in 550+ cities. MOFSL has AUA of Rs 3.2 lakh cr.

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