Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q1 FY24 Earnings Presentation
36 slides from Motilal Oswal Financial Services's earnings presentation, Jul 27, 2023
Slide 1: Exchange intimation letter for investor presentation
July 27, 2023 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 – Financi
Slide 2: Financial Services Earnings Presentation Q1FY24
Financial Services Earnings Presentation Q1FY24 BUSINESSES FOCUS ON SUSTAINABLE ALL BIZ OFFER HUGE BUILDING SCALE GROWTH HEADROOM FOR GROWTH
Slide 3: Group Structure
Group Structure MOFSL Group Capital Markets Asset and Wealth Management Housing Finance Asset Private Broking & Institutional Investment Wealth Management Equity & Distribution Equities Banking Management Company Real Estate Motilal Oswal Motilal Oswal Motilal Oswal Asset Motilal Oswal Motilal Oswal
Slide 4: Key Highlights for Q1FY24
Key Highlights for Q1FY24 Assets under advice Revenue Operating profit Total PAT Net Worth ₹ 3.8 tn 31% YoY ₹ 12.6 bn 32% YoY ₹ 2.4 bn 28% YoY ₹ 5.3 bn ₹ 69.3 bn 23% YoY Lending Book* ROA (incl. OCI)** ROE** Clients Employees ₹ 91.1 bn 49% YoY 10.6% 36.3% 5.6 mn 12% YoY 9,807 *Average lending book 3
Slide 5: Business Updates
Business Updates • MOFSL is amongst the top 3 broking houses in terms of gross brokerage revenue • Capital Markets business reported all-time high profit of ₹ 1.55 bn in Q1FY24, up 63% YoY • Retail Cash market share was up 110 bps QoQ to 6.2% Capital Markets • Retail F&O Premium market share stood a
Slide 6: 23% Net Worth CAGR
23% Net Worth CAGR Operating PAT and Fund Based Investments PAT driving robust Net Worth growth at 23% CAGR post 28% Dividend Payouts Operating PAT Fund Based PAT Dividend Payout 69.3 ₹ Bn 62.5 56.7 21.5 17.2 44.6 17.2 30.9 12.8 28.9 30.5 5.0 2.3 17.8 4.5 57.2 59.6 12.9 14.4 47.9 1.3 33.9 39.2 0.5 2
Slide 7: Consolidated P&L
Consolidated P&L PARTICULARS (₹ Mn) Q1FY24 Q1FY23 YoY (%) Q4FY23 QoQ (%) Capital Markets (Broking, Distribution & IB) 8,794 6,107 44% 7,448 18% Asset and Wealth Management 2,407 2,192 10% 2,517 -4% Housing Finance 1,436 1,262 14% 1,386 4% Total Revenues 12,637 9,561 32% 11,350 11% Total Revenues aft
Slide 8: Consolidated Profit After Tax
Consolidated Profit After Tax Particulars (₹ Mn) Q1FY24 Q1FY23 YoY (%) Q4FY23 QoQ (%) Capital Markets (Broking, Distribution & IB) 1,554 956 63% 1,355 15% Asset & Wealth 641 583 10% 660 -3% Home Finance 286 321 -11% 315 -9% Intercompany adj. -86 6 - -2 - Operating PAT 2,396 1,872 28% 2,326 3% Operat
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet ROE* PARTICULARS (₹ Bn) Jun 30, 2023 Mar 31, 2023 SOURCES OF FUNDS Q1FY24# FY23 Net Worth 69.3 62.5 36% 18% Borrowings 105.5 103.1 *Basis Reported PAT excl. OCI # Annualized Minority Interest 0.3 0.3 Total Liabilities 175.1 165.9 Net Worth Deployment APPLICATION OF FUNDS 1
Slide 10: Focus on building recurring revenues
Focus on building recurring revenues…. Particulars NSE Active clients Total ARPU (₹) Q1FY23 Q4FY23 Q1FY24 Q1FY23 Q4FY23 Q1FY24 Broking 930,588 8,05,125 7,61,297 24,043 24,708 25,443 NSE Active Clients market share stable at 2.5% across quarters Particulars AUM/Loan Book (₹ Bn) Net Yield/NIM Net Reve
Slide 11: Revenue from Businesses catering to HNI clients
Revenue from Businesses catering to HNI clients Wealth Broking & Q1FY24 (₹ mn) Total Management Distribution Revenue 643 765 1,408 PBT 203 436 639 • Wealth Management business offers financial products and solutions across asset classes to HNI / Ultra-HNI clients • Broking and Distribution (B&D) bus
Slide 12: Capital Markets
Capital Markets • ADTO grew by 171% YoY/28% QoQ to ₹ 4,124 bn. 7.2% 6.2% ₹ 25,000+ ₹ 223 Bn ₹ 3.2 Bn Retail F&O premium Retail cash market One of the highest Distribution AUM; Distribution Net • Retail F&O ADTO market share grew by 44 bps QoQ to market share share; +110 bps QoQ ARPUs in the industry
Slide 13: Broking and Distribution – Gaining Market Share
Broking and Distribution – Gaining Market Share ADTO continue to rise Gaining F&O market share* 4,124 YoY (Q1FY24 – Q1FY23) Retail Cash 24 2,469 171% 6.1% 6.2% Market Share % 5.7% 5.7% 5.6% 1,524 F&O (₹ Bn) 4.3% 23 3.9% Retail F&O 877 3.4% 4,100 2.8% 2.7% Market Share % 440 23 Cash (₹ Bn) 235 31 2,4
Slide 14: Broking and Distribution – Growing and Diversified Client Base
Broking and Distribution – Growing and Diversified Client Base Client base Emphasis on diversified sourcing model 10. 0 35.0 36.0 40. 0 5% 7% 7% 4% Online 5% 9.0 Active Clients 9% 10% 8% 10% 28.5 35. 0 14% Franchisee (Lakhs) 8.0 30. 0 7.0 25% 6.0 19.7 25. 0 29% 36% 38% 35% Branch 5.0 14.5 20. 0 Tota
Slide 15: Broking and Distribution – Emphasis on Revenue & Productivity
Broking and Distribution – Emphasis on Revenue & Productivity One of the Highest ARPUs in the industry Franchisee Productivity Brokerage 9,0 00 1.4 1.3 1.6 Franchisees 8,0 00 1.3 1.2 1.4 ARPU (₹) 7,0 00 1.0 1.2 Revenue per 21,539 6,0 00 18,754 1.0 18,226 Franchisee 17,763 17,608 5,0 00 Overall 4,0 0
Slide 16: Broking and Distribution – Large client assets under advice
Broking and Distribution – Large client assets under advice Rising Distribution (Mass Affluent) AUM Distribution AUM Mix MF 11% PMS Distribution 213 223 AUM (₹ Bn) 28% PE/RE 182 19% AIF 134 IAP 90 8% 16% Bonds 8% 10% Others Mar-20 Mar-21 Mar-22 Mar-23 Jun-23 *incl. Investment Advisory Portfolio (IAP
Slide 17: Capital Markets
Capital Markets INSTITUTIONAL INVESTMENT EQUITIES BANKING • Focus driven differentiated research products with Equity Capital Market mandates 250+ companies covering 21 sectors, catering to 830+ institutional clients. • Strong focus on Offshore as FII activity picks up. IPO QIP OFS ₹ 6.1 Bn ₹ 10.0 B
Slide 18: Asset and Wealth Management
Asset and Wealth Management • AMC AUM stood at ₹ 515 bn, up 19% YoY/13% QoQ with ₹ 515 Bn 35% ₹ 99 Bn ₹ 664 Bn ₹ 19 Bn MF AUM at ₹ 335 bn and Alternates AUM at ₹ 178 bn. AMC AUM; +19% Alternates Share in PE & RE Fee Earning Wealth AUM; +93% Wealth Net Sales in YoY AMC AUM AUM YoY Q1FY24; +51% QoQ •
Slide 19: Asset Management
Asset Management AMC AUM Breakup and Growth trend AMC MF AUM mix 515 ₹ Bn Direct 490 10% 434 456 14% 18% 13% 14% NDs 40 70 MF AUM 27 56 24% 23% 23% 142 108 PMS AUM 26% 22% MFDs 294 102 147 WM+Bank 19 AIF AUM 21% 25% 21% 25% 26% 116 306 296 335 258 38% 41% 39% 39% 37% 157 Mar-20 Mar-21 Mar-22 Mar-23
Slide 20: Asset Management
Asset Management AMC yields AMC MF Folios Net Revenue to Folio Count 85 83 AAUM (bps) 50 90 77 76 85 1.9 1.9 2.0 (mn) 45 74 80 75 40 42 42 70 PAT to AAUM 1.3 (bps) 35 65 38 60 1.0 33 30 55 25 32 50 45 20 40 FY20 FY21 FY22 FY23 Q1FY24 Mar-20 Mar-21 Mar-22 Mar-23 Jun-23 AMC MF SIP flows High Share of
Slide 21: Private Equity & Real Estate Funds
Private Equity & Real Estate Funds Successful launch of PE & RE Funds over years PE & RE Fund Level IRR Expected exit in near future IBEF IV Valued IRR (%) FY25 FY24 FY26 IREF V ₹ 45 Bn 26.8% Fully IREF IV ₹ 12 Bn IBEF III ₹ 11.5 Bn 21.8% 20.4% Exited IRR (%) Exited in 19.0% 18.4% IREF III ₹ 23 Bn 1
Slide 22: Wealth Management
Wealth Management AUM diversified across asset classes Continued traction in RM addition Total 156 253 344 520 664 MF 6,0 00 250 Family 500 441 500 197 PMS 182 RM 5,0 00 393 450 450 200 400 40% 400 AIF 144 350 325 38% 350 4,0 00 129 123 150 300 249 300 PE/RE 33% 3,0 00 250 11% 10% 250 147 37% 11% 8%
Slide 23: Wealth Management
Wealth Management AUM Mix Revenue mix 37% 63% MF Transactional 5% 7% 100 % 70% 90% 7% 60% PMS/AIF 80% 43% 46% 50% Recurring 70% 45% 50% PE/RE 60% 45% 50% 40% DP Bonds 57% 30% 40% 30% 13% 54% 50% 50% 20% 20% 12% 10% Others 10% 0% 16% 0% Recurring AUM Transactional AUM FY22 FY23 Q1FY24 * excl. Custody
Slide 24: Home Finance
Home Finance • Strengthened senior management team through key ₹ 37.8 Bn ₹ 930 Mn 7.6% 8.2% 3.0% leadership hiring including CEO, COO, CBO and CHRO. Disbursements in NIM in Q1FY24 Incremental COF in ROA in Q1FY24 AUM as on Jun-23 Q1FY24 Q1FY24 • AUM grew by 6% YoY to ₹ 37.8 bn as at June 30, 2023 re
Slide 25: Home Finance- Onboarded Experienced Leaders
Home Finance- Onboarded Experienced Leaders Sukesh Bhowal has a rich experience of 27 years in Business Management, Sales & Distribution, Retail Lending, Mortgage Lending, Real Estate Lending and Retail Banking. He was associated with Chief DCB Bank, where he headed the Mortgages, Micro-Mortgages, C
Slide 26: Home Finance – Portfolio Metrics
Home Finance – Portfolio Metrics AUM Trend Product Mix 33% New Purchase 38.4 37.8 24% Self-Construction 35.2 35.5 AUM (₹ Bn) 15% Construction Finance* 11% Resale 07% LAP 03% Home Impr./Ext. FY22 FY23 Q1FY23 Q1FY24 02% Composite 06% Others Customer Mix AUM by Ticket Size 07% Up to 0.5 Mn 50% Salaried
Slide 27: Home Finance
Home Finance ECL Provisioning Details PARTICULARS (₹ Mn) Q1FY24 STATE NOS. OF MOHFL’s Geographic Reach BRANCHES Stage 1 & 2 36,791 PRESENCE ACROSS MH Maharashtra 32 % portfolio in stage 1 & 2 98.14% GJ Gujarat 16 111 LOCATIONS IN 12 STATES/UTS Stage 3 696 TN Tamil Nadu 15 % portfolio in Stage 3 1.86
Slide 28: Home Finance
Home Finance Diversified Liability Mix Key Ratios Term loan 7% 3% 8% 6% 8% 7% 7% 5% 9% NCD Parameters Q1FY24 Q1FY23 16% 5% 52% NHB 40% 28% 21% 21% Securitization Yield 14.5% 13.7% ECB 49% 55% 50% 59% 45% CP COF 8.3% 7.9% FY20 FY21 FY22 FY23 Q1FY24 Spread 6.1% 5.9% NIM 7.6% 7.6% Net Worth and Net D/E
Slide 29: Fund Based Investments
Fund Based Investments • Fund based book includes sponsor commitments cum ₹ 50.8 Bn ₹ 47.3 Bn 17% 19% investments in equity MF, PE funds, Real estate funds, Total equity Cumulative XIRR on XIRR on PE/RE Total investments investment including AIF and strategic equity investments. total investments in
Slide 30: Fund Based Investments – Skin in The Game
Fund Based Investments – Skin in The Game Skin in the Game in AMC (₹ Bn) Strong Growth in investments over the years 515 AMC AUM 47.3 Sponsor 42.8 21 40.5 AUM 17.0 20 Promoter 13.3 AUM 31.0 17.4 13.1 Skin in the game in PE & RE (₹ Bn) 17.5 1.7 29.5 30.3 136 Total Capital 23.1 Raise till date 15.8 17
Slide 31: Internal Group Restructuring - Objectives and Rationale
Internal Group Restructuring- Objectives and Rationale • Comply with the NSE Circular which states that broking company is not permitted to engage in any business other than that of securities i.e. broking company cannot have Motilal Oswal Home Finance Limited (MOHFL) and Motilal Oswal Finvest Limit
Slide 32: Restructuring Steps
Restructuring Steps Step 1: Composite Scheme of Arrangement u/s Step 1 - Key Points: 230 to 232 of the Companies Act, 2013 • Appointed Date: April 1, 2023 • Effective Date: Receipt of all requisite regulatory approvals Slump Sale of B&D Undertaking of MOFSL into Part A: A New B&D Co. at Tax FMV • Ne
Slide 33: Internal Group Restructuring
Internal Group Restructuring Current Structure Proposed Structure 69.68% 30.32% 69.68% 30.32% Promoters Public Promoters Public MOFSL MOFSL (Broking & Distribution, (Wealth and Investments Fund Based Investments in Subsidiary) and Others) 75.35% 100% 100% 100% 100% 83.34% 100% 100% 100% 100% Broking
Slide 34: MOFSL - ESG Initiatives
MOFSL - ESG Initiatives Launched online ESG profile platform, CRISIL has assigned “STRONG” rating to which adheres to international frameworks such as MOFSL in its Sustainability Yearbook 2022 IFC, GRI, SASB, CDP etc. ENVIRONMENTAL SOCIAL GOVERNANCE • More than 80% of servers are in • Physical & emo
Slide 35: 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 36: For any query, please contact
For any query, please contact : S H A L IB H A D RA S H A H CHIEF FINANCIAL OFFICER 91-22-7193 4917 / 98190 60032 shalibhadrashah@motilaloswal.com C H E TA N PA RM A R HEAD INVESTOR RELATIONS 91-22-7190 6600 / 74003 12700 chetan.parmar@motilaloswal.com
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