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Motilal Oswal Financial Services Ltd. announced its results for the quarter and nine months ended December 31, 2023 post approval by the Board of Directors at a meeting held in Mumbai on January 24, 2024.

  Performance for the quarter ended December 31, 2023:

• Consolidated PAT including Other Comprehensive Income (OCI) for the quarter grew to 774 cr up 222% YOY.  Consolidated PAT (incl OCI) grew to Rs. 2,001 cr for 9MFY24 up 159% YOY.
• Consolidated operating revenue for the quarter grew to Rs. 1,377 cr, up 30% YoY/2% QoQ
• Consolidated operating profit after tax (PAT) for the quarter grew to Rs. 311 cr, up 35% YoY/8% QoQ
• Delivered Highest ever quarterly Capital market business PAT of Rs. 202 cr, up 44% YoY/12% QoQ.
• Asset & Wealth Management businesses PAT for the quarter grew to Rs. 79 cr, up 17% YoY/ 16% QoQ.
• Housing finance business PAT for the quarter grew to Rs. 36 cr, up 11% QoQ.
• Robust Net worth of Rs. 8,267 cr as of December 31, 2023 up 33% YoY

Speaking on the performance of the company, Mr. Motilal Oswal, MD & CEO said “We have delivered strong performance across segments in Q3FY24. Our Capital market business has demonstrated remarkable performance, reporting an all-time high quarterly profit and strengthening our retail market share position in Cash and F&O Premium segment to 7.5% & 8.1% respectively. We continue to focus on our strategy to diversify our businesses towards linear sources of earnings. Our Asset and Wealth Management AUM touched a new high of Rs. 1.64 lakh cr, showcasing significant growth. Our Asset Management business has seen strong improvement in performance & flows and is poised gain from process driven investing and its niche offerings. The Wealth Management business is progressing towards scalability, bolstered by strengthened leadership team and ongoing investments in Relationship Managers. Additionally, we are anticipating our first close for our 6th Real Estate fund in Q4FY24, adding to our diverse investment products. Furthermore, in our HFC business, we are strengthening sales force and optimizing productivity to drive robust disbursements and AUM growth. We firmly believe that each of our businesses possesses immense potential and is well-positioned to leverage the numerous opportunities present in the market. As we move forward, we shall continue to pursue our strategic objectives diligently, aiming for sustained growth and continued excellence across all our operations.”

Performance of Business Segments for the quarter and year ended December 31, 2023

·      Capital markets Businesses (Broking & Investment banking)

* Capital markets comprise of Retail Broking and Distribution, Institutional Equities and Investment Banking business. Revenues for this segment grew to Rs. 1,028 cr, +36% YoY/1% QoQ in Q3FY24.

* PAT grew to Rs. 202 cr + 44% YoY/12% QoQ

* Overall ADTO grew 95% YoY / 8% QoQ to Rs. 5.7 lakh crore.

* In Retail Broking & Distribution, Retail Cash ADTO market share grew by 164 bps YoY/42 bps QoQ to 7.5%. 

* Retail F&O Premium market share grew to 8.1% up 120 bps YoY/60 bps QoQ.

* NSE active clients grew to 8.22 lakhs as of December 2023. Acquired ~1.45 Lakh clients in Q3FY24.

* Distribution AUM grew by 25% YoY at Rs. 26,281 cr as of December 31, 2023. Distribution Net Sales grew to Rs. 773 cr during Q3FY24 up 25% QoQ

* Net Interest income (NII) grew to Rs. 149 cr, up 51% YoY /11% QoQ.

* Investment Banking successfully completed 6 deals with issue size of Rs. 5,194 cr in Q3FY24. Revenues for Q3 FY24 at Rs. 19 cr up 306% YoY

* Capital Market PBT margin on Net Revenue improved to 48% from 42% in Q3FY23 and Q2FY24

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

* Overall Asset and Wealth Management revenues grew to Rs 287 cr in Q3FY24, up 14% YoY/13% QoQ. Profits for Q3FY24 grew by 17% YoY/16% QoQ to Rs. 79 cr.

* Asset Management business AUM across MF, PMS & AIF grew strongly to Rs. 64,858 bn, +40% YoY/17% QoQ. Revenues for Q3FY24 grew to Rs. 172 cr, +22%YoY/15% QoQ. Strong performance across MF, PMS & AIF schemes resulted in gross sales of Rs. 4,941 cr, up 189% YOY/ 23% QoQ.

* MF AUM grew to Rs. 42,860 cr, up 45% YoY/19% QoQ. Strong performance across active mutual fund schemes resulted in gross sales of Rs. 2,821 cr, up 294% YOY /46% QoQ.

* Our Small Cap MF NFO garnered inflows of Rs. 1,240 cr, highest flows in Small Cap category till date

* Alternates AUM grew to Rs. 22,000 cr, up 30% YoY/14% QoQ. AIF AUM crossed Rs. 10,000 cr mark in Jan’24 and continue to be one of the leading AMC in CAT III AIF

* Our share of Alternate Assets in AMC, comprising of PMS & AIF, is one of the highest among AMC peers at 34%. 19 out of 19 Alternate Assets schemes have outperformed the benchmark in past 1-year period.

* Added 261,000 new SIPs in Q3FY24, up 293% YoY/24% QoQ. Monthly SIP flow for December 2023 grew to Rs. 2.81 bn up 127% YoY/24% QoQ.

* Private Equity business fee earning AUM of Rs. 9,384 cr across two growth capital Private Equity funds and four Real Estate funds. In Q3FY24, revenues stood at Rs. 45 cr. Partial investment exits in private equity funds through IPO in Happy Forgings Limited and Updater Service Limited at IRR of 32.5% and 15.5% respectively in Q3FY24.

* Wealth Management business AUM grew by 117% YoY/22% QoQ at Rs. 89,632 cr as on December 31, 2023. RM additions bolstering net sales of Rs. 3,018 cr in Q3FY24, +152% YoY/32% QoQ.

* Revenue for Q3FY24 stood grew to Rs. 70 cr, up 20% YoY/22% QoQ.

* Added further 51 RMs in the last nine months, taking total count to 233 RMs as on December 31, 2023. We continue to invest in Wealth business by furthering RM additions.

* Investments in RM has brought down operating margin to 30% in 9MFY24 compared to historical trend of 35% - 40%. Expect to recoup margins in coming years

·      Housing finance business

* Motilal Oswal Home Finance reported profit of Rs 36 cr, up 11% QoQ in Q3FY24.

*  AUM grew to Rs 3,781 cr as on December 31, 2023.

* Disbursements grew sharply to Rs 247 cr in Q3FY24, up 22% YoY / 25% QoQ.

* Net Interest Income grew to Rs 80 cr up 6% YOY/3%QoQ and NIM stood at 7.7% in Q3FY24.

* Yield on advances increased to 14.2%, up 40 bps YoY in line with rise in Cost of funds and spread maintained at 5.9%.

* Strengthened our Sales RM team to 856 RMs. Added 232 Sales RM during Q3FY24 and 373 Sales RM in last 12 months. This has impacted our Cost to income ratio.

* Asset Quality – Collection efficiency improved to 101.3% (Total EMI Collected/1 EMI Due) in Q3FY24. GNPA/NNPA stood at 2.1%/1.3%respectively.

* Net Gearing stands at 1.9x and CRAR remains robust at 47.5%. ROA of 3.6% in Q3FY24 vs 3.3% in Q2FY24

Treasury investments includes sponsor commitments to our AMC, PE funds, RE funds and strategic equity investments.

* Total equity investment including alternate funds grew strongly to Rs 5,872 cr as of December 31, 2023 up 35% YoY/14% QoQ. XIRR since inception improved to 18.5% in Q3FY24 vs. 17% in Q3FY23