Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q2 FY22 Earnings Presentation
50 slides from Motilal Oswal Financial Services's earnings presentation, Oct 28, 2021
Slide 1: Exchange filing cover letter: unaudited financial results
October 28, 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: Unaudited Financial Results (Consolidated and
Slide 2: Filing letter closing and signature
The Board Meeting commenced at 03.40 p.m. and concluded at 05.15 p.m. Kindly take the same on record. Thanking you, Yours faithfully, For Motilal Oswal Financial Services Limited Kailash Digitally signed by Kailash Chunnilal Chunnila Purohit Date: 2021.10.28 l Purohit 18:28:42 +05'30' Kailash Purohi
Slide 3: Earnings Presentation Q2FY22 & H1FY22
Motilal Oswal Financial Services Ltd Earnings Presentation | Q2FY22 & H1FY22 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET
Slide 4: Key Highlights, Financials, Businesses
Page 3-4 Key Highlights Page 5-8 Financials Page 9-41 Businesses
Slide 5: Diversified business model
Diversified business model Motilal Oswal Financial Services FUND BASED CAPITAL MARKETS ASSET MANAGEMENT HOUSING FINANCE INVESTMENTS Highest ever broking AMC AUM stood at Rs 496 India Ratings assigned IND MTM gain of Rs 3.6 bn revenue and profit bn, +32% YoY in H1FY22 AA rating, outlook in H1
Slide 6: 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 130% in H1FY22 Management 6% in H1FY22 investments Consolidated 309% in H1FY22 25% in H1FY22 37% in H1FY22 (8% of NWE) (3% of NWE) (20% of NWE) (68% o
Slide 7: Consolidated Financials – Revenue Mix
Consolidated Financials – Revenue Mix Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) Capital Markets (Broking, Distribution & IB) 6,084 4,236 44% 5,132 19% 11,216 7,674 46% Asset Management 1,472 1,162 27% 1,381 7% 2,853 2,198 30% Private Equity (1) 1,510 268 463% 257
Slide 8: Consolidated Financials – PAT Mix
Consolidated Financials – PAT Mix PAT (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) Capital Markets (Broking, Distribution & IB) 1,213 797 52% 782 55% 1,995 1,370 46% Asset Management 417 290 44% 356 17% 773 530 46% Private Equity (1) 864 68 - 62 - 926 121 - Wealth Management 15
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs bn) H1FY22 FY21 Sources of Funds Net Worth 51.7 44.3 Borrowings (1) 48.6 56.9 Minority Interest 0.4 0.6 Total Liabilities 100.6 101.8 Application of Funds Fixed assets (net block) 3.6 3.5 Investments 41.5 39.2 Loans and Advances (2) 46.6 45.2 Net current as
Slide 10: Strong Revenue and Profit trend
Strong Revenue and Profit trend Revenue Trend Profitability Trend Revenues (Rs bn) PAT (Rs bn) EPS (Rs) CAGR: 19% CAGR: 36% 85 39.2 29.0 26.8 23.2 23.6 52 19.3 43 12.5 25 20 18 6.3 7.6 3.6 2.9 1.8 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Revenue Mix PAT Mix Capital Market Asse
Slide 11: Businesses Building Scale
Businesses Building Scale AMC AUM growth trend (Rs bn) PE/RE AUM & Fund Raise AUM (Rs bn) Fund Raised (Rs bn) CAGR: 21% 496 CAGR: 21% 90 70. 0 434 80 389 65 66 69 60. 0 356 70 64 50. 0 294 60 50 47 40. 0 203 31 40 30. 0 30 11.1 20. 0 20 8.5 8.1 10 16.6 3.0 10. 0 0 0.0 FY17 FY18 FY19 FY20 FY21 H1FY22
Slide 12: 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) 60liquid Net Worth: 9.0 • Helped “seed” new 8.0 50 6.8 businesses, which are 7.0 40 adjacent, scalable and 6.0 4.9 profitable opportunities. 5.0 30• Serve as highly li
Slide 13: Growth levers for businesses and performance
Growth levers for businesses and performance GROWTH DRIVERS BROKING & DISTRIBUTION ASSET MANAGEMENT WEALTH MANAGEMENT HOUSING FINANCE Digital acquisition channel Traction in net Expanding products Focus on hiring FOS to takes the lead in client inflows across asset classes. ramp up sales. ad
Slide 14: India's Broking Industry- Huge untapped potential
India’s Broking Industry- Huge untapped potential Demat Account Trend Demat Account Penetration Total Accounts (in mn) New A/c opened (in mn) 32.0% 80. 0 25. 0 70.2 70. 0 55.1 20. 0 60. 0 50. 0 40.9 15. 0 35.9 14.3 15.1 40. 0 13.7% 30. 0 25.4 10. 0 21.0 17.2 5.1% 20. 0 10.3 5.0 10. 0 5.8 4.0 5.0 1.8
Slide 15: India, largely under penetrated market – MF, Wealth and Mortgage
India, largely under penetrated market – MF, Wealth and Mortgage Mutual Fund Penetration Mutual Fund AUM as % of GDP MF AUM (Rs tn) MF AUM % of GDP 140% 35 40. 0% 31 35. 0% 30 24 30. 0% 25 21 22 84% 25. 0% 17 20 63% 15.9% 20. 0% 49% 15 12 12.5% 12.6% 11 10.7% 10.9% 15. 0% 10 8.7% 9.0% 10. 0% 21% 16%
Slide 16: Capital Markets- Broking, Distribution & IB
CAPITAL MARKETS- BROKING, DISTRIBUTION & IB Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) Revenues 6,084 4,236 44% 5,132 19% 11,216 7,674 46% Cash market share up 70 bps QoQ to 6.3% - Brokerage 3,856 3,028 27% 3,572 8% 7,428 5,437 37% - Distribution 387 244 58% 328 1
Slide 17: Broking & Distribution – Strong business performance
Broking & Distribution – Strong business performance Retail Broking & Distribution Investment Banking Ramped up digital acquisition by expanding dedicated digital During the quarter, we completed 3 IPOs- Aditya Birla Sun Life acquisition team. AMC, Devyani International and GR Infraprojects Ltd.
Slide 18: Broking & Distribution- Growth Journey
Broking & Distribution- Growth Journey Revenue & PAT Trend (Rs mn) Investment in talent for future growth Revenue (Rs mn) PAT (Rs mn) Advisors Employees 5,547 17,088 4,00 0 4,922 3,030 3,50 0 12,249 3,00 0 11,209 11,334 11,153 3,280 2,002 2,50 0 1,810 1,877 2,429 7,538 2,200 1,467 2,00 0 6,010 1,846
Slide 19: Broking & Distribution – Strong growth in Client acquisition
Broking & Distribution – Strong growth in Client acquisition Active Clients (mn) Strong growth in Retail Client base Retail clients (mn) 0.72 CAGR: 28% CAGR: 25% 2.41 0.56 1.97 0.38 1.45 0.32 1.20 0.31 1.05 0.21 0.81 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Significant tractio
Slide 20: Diversifying Customer Segment & Penetration
Diversifying Customer Segment & Penetration Median Age of Clients Acquired Customers acquired % below 30 years of age 40 40 Rising Gen Y & Gen Z 38 customer segment 49% 35 30 36% 23% 18% 15% FY18 FY19 FY20 FY21 H1FY22 FY18 FY19 FY20 FY21 H1FY22 City wise Acquisition Pin code coverage-new clients acq
Slide 21: Strong growth in Distribution AUM serving to mass affluent
Strong growth in Distribution AUM serving to mass affluent DP AUM growth trend (Rs bn) Rising Distribution (Mass Affluent) AUM (Rs bn) 1,854 159 CAGR: 27% CAGR: 31% 128 1,184 96 90 75 607 590 450 468 44 FY17 FY18 FY19 FY20 FY21 H1FY22 FY17 FY18 FY19 FY20 FY21 H1FY22 Distribution AUM Mix SIP AUM and
Slide 22: Broking Business Model
Broking Business Model Retail Broking Business Model Branch Franchisee PCG Digital 93 Branches Largest Franchisee Network (500+ cities) Online client acquisition/ advisory 3,400+ Employees 6200+ Active Partners 700+ Employees 720+ Advisors for HNI Client Servicing 600+ Employees
Slide 23: Broking & Distribution- Digital Ecosystem across Client Life Stage
Broking & Distribution- Digital Ecosystem across Client Life Stage 21
Slide 24: Broking & Distribution- Digital at the core of the company
Broking & Distribution- Digital at the core of the company 22
Slide 25: Asset Management
ASSET MANAGEMENT Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) AMC Closing AUM Avg. AUM (bn) 486 370 32% 444 10% 465 343 35% Rs 496 bn,+32% YoY in H1FY22 Total Revenues 1,472 1,162 27% 1,381 7% 2,853 2,198 30% -Mutual Fund (Net) 379 258 47% 346 10% 726 498 46% -Alter
Slide 26: Asset Management
Asset Management Distribution reach is expanded by reaching out to more number of IFAs and tie-up with banking channels. We are one of the largest players in CAT III long only close ended AIF with AUM of Rs 46 bn (Rs 29 bn AUM + Rs 17 bn commitment). Favourable response to alternate offerings
Slide 27: 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% 14% 18% 16% 14% 10% 10% 496 434 24% 21% 389 29 29% 27% 26% 27% 356 27 28 157 23% 24 294 25% 147 21% 160 19 22% 19% 21% 203 150 5 116
Slide 28: Asset Management – Potential levers to scale profitability
Asset Management – Potential levers to scale profitability AMC EBITDA Margin and Opex to AAUM trend Alternatives share in AUM Performance linked AUM share in alternatives Op. Cost to Avg AUM (bps) EBITDA Margin (%) 24% Alternatives Performace 50 43 40% 38% 38% 45% 37% 40% 62% linked 40 33% 33 35% 30
Slide 29: Private Equity & Real Estate – Scaling big
PRIVATE EQUITY & REAL ESTATE – Scaling big Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) Committed investment AUM till date stands at Total Revenues 1,510 268 463% 257 487% 1,767 487 263% Rs 69 bn, +6% YoY Operating Cost 475 158 200% 169 182% 644 302 113% EBITDA 1,03
Slide 30: Private Equity
PRIVATE EQUITY MOPE Funds Performance Growth PE Funds No. of Investments 32 MOPE Funds stand out with stellar performance. Fund I has Investments Fully Exited 14 exited all its 13 investments and delivered a portfolio IRR of Drawdown Rs 23.7 bn 26.8%. Amount Invested Rs 21.2 bn Fund II was deplo
Slide 31: Real Estate
REAL ESTATE MORE Funds Performance Real Estate Funds No. of Investments 70 IREF II is fully deployed across 14 investments. The Fund has Investments Fully Exited 35 secured 10 complete exits and 1 structured exit and has returned money equalling 134.8% of the Fund Corpus back to Amount Invested Rs
Slide 32: 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 IBEF IV 45.6% IREF V Rs 40 IREF IV Rs 8.1 bn IBEF III Rs 11.5 bn IREF III Rs 23 bn IREF II Rs 10.3 bn bn 19.4% 21.0% 20.5% IBEF II Rs 4.9 17.4% Rs 9.5 bn IBEF I bn Rs 5.5 bn
Slide 33: Wealth Management- Aiming high
WEALTH MANAGEMENT- Aiming high Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) Wealth AUM AUM (bn) 315 200 57% 288 10% 315 200 57% at an all-time high at Rs 315 bn, up 57% YoY Revenues 476 349 36% 396 20% 872 570 53% Operating Cost 268 236 14% 225 19% 493 453 9% EBITDA
Slide 34: Wealth Management
Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Others 315 315 CAGR: 26% 288 253 253 227 36% 200 38% 175 38% 147 156 33% 9% 32% 9% 7% 101 9% 10% 8% 10% 8% 8% 17% 8% 16% 17% 18% 17% 32% 27% 29% 30% 33% FY17 FY18 FY19 FY20 FY21 H1FY22 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Wealth
Slide 35: Home Finance
HOME FINANCE IND AA/Stable rating Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) assigned, outlook Net Interest Income (NII) 694 558 24% 615 13% 1,309 1,126 16% upgrade to Positive by Total Income 733 563 30% 734 0% 1,467 1,141 29% CRISIL and rating Operating Cost 253
Slide 36: Home Finance
Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) H1FY22 GNPA NNPA Stage 1 & 2 33,731 % portfolio in stage 1 & 2 97.82% 4.7% Stage 3 751 3.3% % portfolio in Stage 3 2.18% 2.9% 2.3% 2.2% 2.2% ECL Provision % Stage 1 & 2 1.92% 1.6% 1.5% Total Assets 34,482 1.2% 1.4%
Slide 37: 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% 13.9% 25% 38% 35% 50% 45% 10.1% 10.3% 10.2% 9.3% 8.4% 6.9% 6.1% 4.9% 4
Slide 38: Home Finance
Home Finance Conservative LTV and FOIR Customer segment mix and Product mix LTV FOIR 60% 27% 59% 59% 58% 57% 55% 45% 45% 8% 4% 3% 13% 44% 43% 44% 43% 43% New Purchase Self-Construction Self Employed Salaried Resale Home Improv./Ext. FY18 FY19 FY20 FY21 H1FY22 Composite Others State Wise Disbursement
Slide 39: 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 bn 38% 120 0 34% 40% 33% 10,0 00 6.0 100 0 35% 9,00 0 5.0 30% 8,00 0 4.3 5.0 800 7,00 0 25% 3.2 4.0 6,00 0 2
Slide 40: Our Customers
Our Customers Informal Self Employed Formal Self Employed Bank Salaried Cash Salaried Age 34//Location- Hadapsar Age 43//Location- Jaipur Age 48//Location- Sitapura Age 50//Location- Faridabad • Auto rickshaw driver since last • Owner of a dhaba in Jaipur; • Salaried employee, works as a • Cash sala
Slide 41: End To End Digital Solution For Home Loans
End To End Digital Solution For Home Loans 39
Slide 42: Fund Based Investments
FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q2FY22 Q2FY21 YoY (%) Q1FY22 QoQ (%) H1FY22 H1FY21 YoY (%) investment including Revenues 3,091 2,035 52% 1,108 179% 4,200 3,521 19% MTM gains was Rs 25.3 bn as of H1FY22. -MF/Alternates 1,782 964 85% 1,209 47% 2,991 2,382 26% -PE/RE 1,34
Slide 43: 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 (Rs bn) Promoter AUM (Rs bn) Committed investment AUM (Rs bn) Sponsor Commitment in PE (Rs bn) 19 19 7 496 69 Strong Growth in investments over the years Investment at cost Gain Rs bn
Slide 44: ESG Initiatives
ESG Initiatives ENVIRONMENTAL SOCIAL GOVERNANCE Usage of LED lights which Physical & emotional Diverse Board Composition consume 45% less electricity wellbeing assistance program 50% Independent Director in Emphasis on increased use of Holding Company and at least Medical – Moral – Finan
Slide 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 — Q2 FY22 Earnings Presentation on 6ix