Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q1 FY22 Earnings Presentation
45 slides from Motilal Oswal Financial Services's earnings presentation, Jul 29, 2021
Slide 1: Exchange filing cover letter for investor presentation
July 29, 2021 BSE Limited National Stock Exchange of India Limited P. J. Towers, Exchange Plaza, Plot No. C/1, G Block, Dalal Street, Fort, Bandra-Kurla Complex, Bandra (E), Mumbai - 400001 Mumbai - 400051 Security Code: 532892 Symbol: MOTILALOFS Sub: Investor(s)/Analyst(s) Presentation – Financial
Slide 2: Motilal Oswal Financial Services Ltd Earnings Presentation Q1FY22
Motilal Oswal Financial Services Ltd Earnings Presentation | Q1FY22 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET
Slide 3: Key Highlights, Financials, Businesses
Page 3-4 Key Highlights Page 5-8 Financials Page 9-37 Businesses
Slide 4: Diversified business model
Diversified business model Motilal Oswal Financial Services FUND BASED CAPITAL MARKETS ASSET MANAGEMENT HOUSING FINANCE INVESTMENTS Acquired 2.15 lakh AMC AUM stood at Rs Logins & disbursements MTM gain of Rs 0.9 bn clients in Q1FY22, 465 bn, +35% YoY in have seen strong uptick in in Q1FY22
Slide 5: Business-wise RoE mix
Business-wise RoE mix Group RoE* Segment-wise RoE, with % of net worth employed (NWE) Capital Markets Asset & Wealth Housing Finance Fund based MOFSL 119% in Q1FY22 Management 4% in Q1FY22 investments Consolidated 145% in Q1FY22 14% in Q1FY22 23% in Q1FY22 (7% of NWE) (4% of NWE) (22% of NWE) (66% o
Slide 6: Consolidated Financials – Revenue Mix
Consolidated Financials – Revenue Mix Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Broking 5,120 3,434 49% 5,131 0% Investment Banking 12 4 243% 5 162% Asset Management (1) 1,381 1,036 33% 1,831 -25% Private Equity 257 219 17% 245 5% Wealth Management 396 221 79% 371 7% Housing Finance 1
Slide 7: Consolidated Financials – PAT Mix
Consolidated Financials – PAT Mix Core Businesses fired all cylinders PAT (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Broking (1) 799 613 30% 834 -4% Investment Banking -17 -39 - -32 - Capital Markets 782 573 36% 802 -3% Asset Management (2) 356 240 48% 691 -48% Private Equity 62 52 18% 55 11% Weal
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs bn) Q1FY22 FY21 Sources of Funds Net Worth 46.1 44.3 Borrowings (1) 50.4 56.9 Minority Interest 0.5 0.6 Total Liabilities 97.0 101.8 Application of Funds Fixed assets (net block) 3.5 3.5 Investments 36.8 39.2 Loans and Advances (2) 44.7 45.2 Net current ass
Slide 9: Strong Revenue and Profit trend
Strong Revenue and Profit trend Revenue Trend Profitability Trend Revenues (Rs bn) PAT (Rs bn) EPS (Rs) 85 CAGR: 19% 39.2 29.0 26.8 23.2 43 19.3 12.5 25 9.6 20 18 15 6.3 3.6 2.9 1.8 2.2 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 Revenue Mix PAT Mix Capital Market Asset & Wealth
Slide 10: Businesses Building Scale
Businesses Building Scale AMC AUM growth trend (Rs bn)* Wealth AUM growth trend (Rs bn) 288 CAGR: 21% 465 CAGR: 26% 434 253 389 356 294 175 147 156 203 101 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) 1,553 140 CAGR
Slide 11: Strong growth in Net Worth
Strong growth in Net Worth Net Worth Trend Net Worth (Rs bn) P/BV (x) Benefits of having near to 10.0 6 yrs CAGR: 23% (post buyback) 50liquid Net Worth: 9.0 45• Helped “seed” new 8.0 6.8 40 businesses, which are 7.0 35 adjacent, scalable and 6.0 4.9 30 profitable opportunities. 5.0 25• Serve as high
Slide 12: Growth levers for businesses and performance
Growth levers for businesses and performance GROWTH DRIVERS BROKING & ASSET MANAGEMENT WEALTH MANAGEMENT HOUSING FINANCE DISTRIBUTION Traction in net Expanding products Incremental focus on inflows across asset classes. ramping up sales. Benefitting from Industry consolidation Increasing
Slide 13: Broking & Distribution
BROKING & DISTRIBUTION Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Revenues 5,120 3,434 49% 5,131 0% ADTO grew 104% YoY in Q1FY22 - Brokerage 3,572 2,397 49% 3,482 3% - Distribution 328 166 97% 334 -2% Operating Costs 3,490 2,220 57% 3,378 3% EBITDA 1,630 1,214 34% 1,753 -7% PBT 1,095 8
Slide 14: Broking & Distribution – Strong business performance
Broking & Distribution – Strong business performance Retail Broking & Distribution Institutional Broking Ramped up digital acquisition by expanding dedicated digital Institution broking team wins big in Asiamoney poll 2020. acquisition team. Ranked #1 Local Brokerage 58% of total trades were
Slide 15: Broking & Distribution – Growth Journey
Broking & Distribution- Growth Journey Revenue & PAT Trend (Rs mn) Rising advisors headcount to serve growing client base Revenue (Rs mn) PAT (Rs mn) 17,088 1,846 1,868 4,00 0 3,030 3,50 0 12,249 3,00 0 1,283 11,209 11,334 989 2,50 0 1,810 1,877 7,538 1,467 2,00 0 780 6,010 636 5,120 1,50 0 692 799
Slide 16: Broking & Distribution – Strong growth in Client acquisition
Broking & Distribution – Strong growth in Client acquisition Active Clients (mn) MOFSL Broking ADTO (Ex-prop, Rs bn) Cash ADTO F&O ADTO 0.65 CAGR: 28% 0.56 579 CAGR: 51% 440 0.38 0.31 0.32 285 235 547 0.21 174 411 137 85 253 216 121 159 74 11 15 15 19 29 32 32 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY
Slide 17: Broking & Distribution – Strong growth in Distribution AUM
Broking & Distribution – Strong growth in Distribution AUM DP AUM growth trend (Rs bn) Rising Distribution AUM (Rs bn) 1,553 140 CAGR: 27% CAGR: 31% 128 1,184 96 90 75 607 590 450 468 44 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 Distribution AUM Mix SIP AUM and Live SIP count A
Slide 18: Broking Business Model
Broking Business Model Retail Broking Business Model Branch Franchisee PCG Online Business & Digital Acquisition 91 Branches Largest Franchisee Network (500+ cities) Online client acquisition/ advisory 3,300+ Employees 5800+ Active Partners 1,050+ Employees 700+ Advisors for HNI Clie
Slide 19: Broking & Distribution – Digital Ecosystem across Client Life Stage
Broking & Distribution- Digital Ecosystem across Client Life Stage 18
Slide 20: Broking & Distribution – Digital to the core of the company
Broking & Distribution- Digital to the core of the company 19
Slide 21: Investment Banking
INVESTMENT BANKING DEALS Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Revenues 12 4 243% 5 162% QIP - Rs 177 bn Operating Costs 32 54 -40% 40 -19% EBITDA -20 -51 - -35 - PBT -25 -52 - -39 - QIP - Rs 150 bn PAT -17 -39 - -32 - Strong pipeline of signed IPO mandates which will start ente
Slide 22: Asset Management
ASSET MANAGEMENT Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) AMC Closing AUM Avg. AUM (bn) 444 315 41% 430 3% Rs 465 bn,+35% YoY in Total Revenues 1,381 1,036 33% 1,831 -25% Q1FY22 -Mutual Fund (Net) 346 240 44% 364 -5% -Alternates (Net) 481 357 34% 721 -33% Opex 339 266 27% 350 -3% Str
Slide 23: Asset Management
Asset Management Distribution reach is expanded by reaching out to more number of IFAs and tie-up with banking channels. Favourable response to alternate offerings under AIF strategy, garnered Rs 5.2 bn in Q1FY22. Expect continued strong flows in a few more AIF strategies which are in pipeline.
Slide 24: Asset Management – Potential levers to scale business
Asset Management – Potential levers to scale business MOAMC AUM breakup and growth trend (Rs bn)* MOMF AUM mix MF AUM PMS AUM AIF AUM Direct NDs IFA WM+Banks CAGR: 21% 465 10% 434 14% 18% 16% 14% 15% 389 28 356 27 24% 28 29% 27% 26% 22% 294 151 27% 24 147 160 19 25% 25% 203 150 22% 19% 21% 21% 5 116
Slide 25: Asset Management – Potential levers to scale profitability
Asset Management – Potential levers to scale profitability AMC EBITDA Margin and Opex to AAUM trend MOAMC profitability trend PAT (Rs mn) Op. Cost to Avg AUM (bps) EBITDA Margin (%) 50 40% 1,601 1,602 43 45% 38% 38% 36% 40% 1,467 40 33% 1,104 35% 30 30 31 30% 30 22% 33 25% 27 20% 20 498 356 15% 10 1
Slide 26: Asset Management – SIP Performance
Asset Management – SIP Performance MOMF SIP AUM of inflows and SIP market share MOMF SIP proportion to SIP flows MO MF SIP % of MOMF gross inflows MO MF SIP AUM Market share Industry SIP AUM as % of Ind Eq MF AUM MOMF SIP AUM as % Eq MF AUM 2.00% 26.1% 26.1% 26.1% 26.5% 1.38% 1.38% 1.37% 1.36% 1.36%
Slide 27: Private Equity & Real Estate
PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Committed investment Total Revenues 257 219 17% 245 5% AUM till date stands at Rs 69 bn, +6% YoY Operating Cost 169 144 17% 146 16% EBITDA 88 75 18% 99 -11% PBT 88 74 19% 98 -11% PAT 62 52 18% 55 11% IBEF IV- One o
Slide 28: PE & RE – Fund performance and allocation
PE & RE – Fund performance and allocation MOPE Funds Performance MOPE Funds- Sector Allocation No. of Investments 31 Consumer 19% Investments Fully Exited 12 Financial Services 32% Drawdown Rs 25.3 bn Pharma Amount Invested Rs 22.8 bn 19% Niche manufacturing 6% Current Value of Investments Rs 41.7 b
Slide 29: PE & RE – Exits from funds provides strong visibility over next decade
PE & RE– Exits from 7 funds provides strong visibility over next decade Launch period of PE & RE Funds PE & RE Fund Level IRR IRR (%) IBEF IV IREF V Rs 40 47.4% IREF IV Rs 8.1 bn IBEF III Rs 11.5 bn IREF III Rs 23 bn IREF II Rs 10.3 bn 26.8% IBEF II Rs 4.9 bn 21.2% 21.2% 19.7% Rs 9.5 bn 16.8% IBEF I
Slide 30: Wealth Management
WEALTH MANAGEMENT Wealth AUM Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) at an all-time high at Rs AUM (bn) 288 178 62% 253 14% 288 bn, up 14% QoQ Revenues 396 221 79% 371 7% and 62% YoY Operating Cost 225 217 4% 212 6% EBITDA 171 4 - 159 7% EBITDA Margin 43% 2% - 43% - PBT 163 1 - 157
Slide 31: Wealth Management
Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Debt 288 288 CAGR: 26% 253 253 227 200 38% 178 38% 175 33% 147 156 32% 9% 30% 9% 10% 8% 101 12% 10% 8% 8% 7% 8% 16% 17% 18% 17% 17% 34% 33% 32% 27% 29% FY17 FY18 FY19 FY20 FY21 Q1FY22 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Wealth
Slide 32: Home Finance
HOME FINANCE Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Net Interest Income (NII) 615 568 8% 690 -11% Improvement in CoF led Total Income 734 578 27% 771 -5% to margin expansion Operating Cost 250 210 19% 230 9% - Employee Cost 180 145 24% 148 21% - Other Cost 70 65 8% 82 -14% Operatin
Slide 33: Home Finance
Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) Q1FY22 GNPA NNPA Stage 1 & 2 33,238 4.7% % portfolio in stage 1 & 2 95.30% Stage 3 1,639 3.3% % portfolio in Stage 3 4.70% 2.9% ECL Provision % Stage 1 & 2 1.66% 2.3% 2.2% 1.8% 1.6% Total Assets 34,797 1.5% 1.3% 1.
Slide 34: Home Finance – Strong liability management
Home Finance – Strong liability management NIM expansion led by traction in CoF Liability mix based on rates (%) NIM (%) Yields (%) Cost of fund (%) Floating Rate Liabilities (%) Fixed Rate Liabilities (%) 14.0% 13.9% 14.3% 14.3% 13.8% 38% 35% 37% 50% 45% 10.1% 10.3% 10.2% 9.3% 8.6% 6.1% 6.5% 4.9% 4
Slide 35: Home Finance
Home Finance Conservative LTV and FOIR Customer segment mix and Product mix LTV FOIR 10% 60% 28% 59% 59% 20% 58% 57% 45% 47% 7% 4% 25% 11% 3% 44% 43% 44% 43% 43% Salaried- Doc Salaried- Cash New Purchase Self-Construction SE- Assessed SE- Doc Resale Home Improv./Ext. FY18 FY19 FY20 FY21 Q1FY22 Compo
Slide 36: Home Finance
Home Finance Opex and Cost to Income trend Net Worth (in mn) and Net D/E Opex (Rs mn) Cost to Income Net Worth (Rs mn) Net Leverage (x) Total cumulative capital 42% 41% 45% infusion at Rs 8.5 bn6.0 120 0 38% 10,0 00 5.0 34% 40% 100 0 33% 4.3 5.0 35% 8,00 0 4.0 3.2 30% 800 25% 6,00 0 2.8 2.6 3.0 600
Slide 37: Fund Based Investments
FUND BASED INVESTMENTS Particulars (Rs mn) Q1FY22 Q1FY21 YoY (%) Q4FY21 QoQ (%) Total quoted equity investment including Revenues 1,108 1,485 -25% 3,029 -63% MTM gains was Rs 22.4 bn as of Q1FY22. -Mutual Fund 1,116 1,286 -13% 920 21% -AIF 94 117 -20% 58 60% -PE/RE -140 147 - 1,869 - -Others 39 -65
Slide 38: Fund Based investments – Skin in the game
Fund Based investments – Skin in the game Skin in the game in AMC Skin in the game in PE AMC AUM (Rs bn) Sponsor AUM in AMC (Rs bn) Committed investment AUM (Rs bn) Sponsor Commitment in PE (Rs bn) 39 7 465 69 Strong Growth in investments over the years Investment at cost Gain Rs bn CAGR: 29% 31.0 3
Slide 39: Response to COVID
Response to COVID Rs 140 mn 1,000 450 Total contribution High Costs 311 Oxygen to PM & CM cares Lifesaving Oxygen Cylinders Concentrators funds Injections • 5,000+ employees and their family members vaccinated 69 5 ECG Machines • Around 80% of employees have BiPAP & & been vaccinated with 1st vaccin
Slide 40: Awards & Accolades
Awards & Accolades Asia Money Brokers Motilal Oswal Wins Motilal Oswal Poll 2020 Best PMS in 10 Financial Services Motilal Oswal PWM win No. 1 Local Brokerage years performance Limited once again “Best Boutique Wealth No. 1 Overall Sales, across all categories recognized as a Great Manager – India a
Slide 41: MOFSL Journey
MOFSL Journey .Reached new highs in terms of Revenue, Profit, Net worth, Balance sheet and AUM .Buyback of equity - Reach expands to shares of Rs 1.5 bn 2019 over 100 business - Asset Management .Group AUM crossed Rs 2003 2012 locations and AUM crossed $ 6 bn 2 tn - MOFSL shifts -Wealth & .Added 2k
Slide 42: Management team
Management team Raamdeo Agrawal, Chairman Arvind Hali, CEO- Housing Finance A CA by qualification, Mr Agarwal started MOFSL along with Mr Motilal Mr Hali is an MMS post graduate from the University of Mumbai and has Oswal in 1987. He is Chairman of MOFSL and also the co-founder of more . . than 20 y
Slide 43: Independent Directors
Independent Directors C. N. Murthy, Independent Director (MOFSL) Mr Murthy has done his B.Tech (Hons) from IIT, Kharagpur. He is a trained Ashok Jain Independent Director (MOAMC) Professional Life/Executive Coach certified by Coaching & Leadership Inc. Mr . Jain is the Whole-time Director and CFO of
Slide 44: Safe Harbour
Safe Harbour This earning presentation may contain certain words or phrases that are forward - looking statements. These forward-looking statements are tentative, based on current analysis and anticipation of the management of MOFSL. Actual results may vary from the forward-looking statements contai
Slide 45: Thank You
Thank You… For any query, please contact : Shalibhadra Shah Chief Financial Officer 91-22-71934917 / 9819060032 shalibhadrashah@motilaloswal.com Rakesh Shinde VP–Investor Relations 91-22-71985510 / 9920309311 rakesh.shinde@motilaloswal.com
Motilal Oswal Financial Services — Q1 FY22 Earnings Presentation on 6ix