Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q3 FY2020 Earnings Presentation
35 slides from Motilal Oswal Financial Services's earnings presentation, Jan 22, 2020
Slide 1: Exchange filing letter: Investor/Analyst Presentation Q3 FY2019-20
MOTILAL 0SWAL Motilal Oswal Financial Services Limited CIN: L67190MH2005PLC153397 Regd. Off.: Motilal Oswal Tower, Rahimtullah Sayani Road, Opp. Pare! ST Depot, Prabhadevi, Mumbai - 400025 Board: +91 22 7193 4200 I 4263 Fax: +91 22 5036 2365 January 22, 2020 BSE Limited National Stock Exchange of In
Slide 2: Earnings Presentation Q3FY20 and 9MFY20
Motilal Oswal Financial Services Ltd Earnings Presentation | Q3FY20 and 9MFY20 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET
Slide 3: Key Highlights, Financials, Businesses
Page 3-5 Key Highlights Page 6-11 Financials Page 12-32 Businesses
Slide 4: Diversified business model
#'" EXPe,,,. Diversified business model [�]-M__o _T L_AI__L O_s_w_A_L_ YEARS Motilal Oswal Financial Services FUND BASED ASSET MANAGEMENT CAPITAL MARKETS HOUSING FINANCE INVESTMENTS AMC AUM crossed the Profit growth of 38% Superior quality of new Total quoted equity mark of Rs 400 bn, +7% Yo
Slide 5: Business-wise RoE mix
#'" EXPe,,,. Business-wise RoE mix [�]-M__o _T L_AI__L O_s_w_A_L_ YEARS Group RoE (Annualised) Segment-wise RoE, with % of net worth employed (NWE) Asset & Wealth Capital Fund based MOFSL Housing Finance Management Markets investments 3% in 9MFY20 Consolidated 101% in 9MFY20 67% in 9MFY20 14% in 9MF
Slide 6: Awards & Accolades
#'" EXPe,,,. Awards & Accolades [�]-M__o _T L_AI__L O_s_w_A_L_ YEARS Asia Money Brokers Business Leadership Poll 2019 MOFSL gets inducted in Awards – Excellence in No. 2 Local Brokerage the HALL OF FAME at the Franchising & No. 1 Overall Sales, 10th Financial Advisor Business Development No. 1 Sales
Slide 7: Consolidated financials – Revenue mix
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Consolidated financials – Revenue mix ]J ]_M__O _ T l Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) Asset Management 1,439 1,368 5% 1,364 5% 4,246 4,390 -3% Private Equity (1) 261 326 -20% 255 2% 756 784 -4% Wealth Management
Slide 8: Consolidated financials – PAT Mix
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Consolidated financials – PAT Mix ]J ]_M__O _ T l PAT (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) Asset Management 410 337 22% 468 -12% 1,240 1,132 10% Private Equity 68 102 -33% 56 21% 175 224 -22% Wealth Management 34 25 36% 7 - 47 11
Slide 9: Consolidated balance sheet
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Consolidated balance sheet ]J ]_M__O _ T l Particulars (Rs bn) 9MFY20 FY19 Sources of Funds Net Worth 35.4 30.5 Borrowings (1) 46.0 51.6 Minority Interest 0.4 0.4 Total Liabilities 81.8 82.5 Application of Funds Fixed assets (net block) 3.2 3.0 Investments 28
Slide 10: Financial performance
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Financial performance ]J ]_M__O _ T l Revenue trend Profitability trend Revenues (Rs bn) PAT (Rs bn) CAGR: 36% CAGR: 20% 29.0 EPS (Rs) 27.0 43 30 19.3 19.7 20.2 25 20 10.9 12 10 1.7 3.6 6.3 3.0 1.5 4.4 FY16 FY17 FY18 FY19 9MFY19 9MFY20 FY16 FY17 FY18 FY19 9MF
Slide 11: Businesses building scale
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Businesses building scale ]J ]_M__O _ T l AMC AUM growth trend (Rs bn) Wealth AUM growth trend (Rs bn) 401 175 189 387 374 356 164 AUM AUM 147 CAGR: 59% CAGR: 43% 101 203 64 105 42 61 FY15 FY16 FY17 FY18 FY19 9MFY19 9MFY20 FY15 FY16 FY17 FY18 FY19 9MFY19 9MFY
Slide 12: Financial performance – Growth drivers
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Financial performance ]J ]_M__O _ T l GROWTH DRIVERS ASSET MANAGEMENT WEALTH MANAGEMENT BROKING & DISTRIBUTION HOUSING FINANCE Positive net flows for AUM grew 15% YoY to ADTO grew 27% YoY Rs 189 bn with net Normalcy in consecutive with rise in cash ma
Slide 13: Asset Management
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V ASSET MANAGEMENT ]J ]_M__O _ T l Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) AMC AUM AUM (bn) 401 374 7% 385 4% 401 374 7% Rs 401 bn in 9MFY20, Revenues 1,439 1,368 5% 1,364 5% 4,246 4,390 -3% +7% YoY -Mutual Fund (Net) 337
Slide 14: Asset Management
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Asset Management ]J ]_M__O _ T l SIP inflows in 9MFY20 continued to run steady at Rs 12.4 bn. Average SIP ticket size at Rs 4,000 per month is higher than the industry average of Rs 2,850. Our SIP market share and proportion to total inflows are on a rising
Slide 15: Asset Management – Potential levers to scale business
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Asset Management – Potential levers to scale business ]J ]_M__O _ T l MOAMC AUM breakup and growth trend (Rs bn) AUM sourcing mix MF AUM PMS AUM AIF AUM IFAs Direct NDs Wealth Captive 374 401 389 355 7% 7% 7% 28 26 12% 11% 8% AUM 27 23% 14% 14% 12% 24 17% 17%
Slide 16: Asset Management – Potential levers to scale profitability
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Asset Management – Potential levers to scale profitability ]J ]_M__O _ T l AMC EBITDA and Opex to AUM trend MOAMC profitability trend EBITDA Margin (%) Op. Cost to Avg AUM (%) PAT (Rs mn) 41% PAT to AAUM 40% 39% PAT 0.42% 0.40% 0.40% 0.66% CAGR:2.3x 0.51% 33%
Slide 17: Asset Management – Granularity of MF AUM
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Asset Management – Granularity of MF AUM ]J ]_M__O _ T l MOMF SIP AUM of inflows and SIP market share MOMF rising SIP proportion 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 1.
Slide 18: Private Equity & Real Estate
#'" w,.,, PRIVATE EQUITY & REAL ESTATE [�]l]_M__O _T l L_A__ L O_S_W_A_L_ ' YEARS Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) PE and RE AUM stood at Revenues 261 326 -20% 255 2% 756 784 -4% Rs 66 bn, +8% YoY in Operating Cost 160 185 -14% 159 1% 460 453 2% 9MFY20 E
Slide 19: PE & RE – Exits from funds provides strong visibility
�� [� PE & RE– Exits from 7 funds provides strong visibility over next decade MOTILAL OSWAL YEARS Launch period of PE Funds QGLP investments delivering higher IRR Investment Amt(Rs Mn) IRR (%) 61% 500 480 IREF IV 450 Rs 12 bn 400 400 400 400 IBEF III IREF III Rs 23 bn 37% IREF II 33% (Rs 10.3 29% 30
Slide 20: Wealth Management
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V WEALTH MANAGEMENT ]J ]_M__O _ T l Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) Wealth AUM AUM (bn) 189 164 15% 181 4% 189 164 15% grew +15% YoY at Rs Revenues 252 249 1% 279 -10% 752 829 -9% 189 bn Operating Cost 206 210 -2%
Slide 21: Wealth Management
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Wealth Management ]J ]_M__O _ T l Wealth AUM growth trend Wealth net sales trajectory WM net Sales (Rs bn) WM AUM (Rs bn) WM Sales RM 135 134 26.6 126 23.6 118 21.2 17.8 77 78 14.7 11.1 49 7.4 42 64 101 147 175 164 189 FY15 FY16 FY17 FY18 FY19 9MFY19 9MFY20 F
Slide 22: Broking & Distribution
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V BROKING & DISTRIBUTION ]J ]_M__O _ T l Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) Sharp improvement in market share at 2.6%, Revenues 3,062 2,701 13% 3,019 1% 8,859 8,525 4% + 30 bps QoQ Operating Costs 2,048 1,876 9% 1,945
Slide 23: Broking & Distribution
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Broking & Distribution ]J ]_M__O _ T l Retail Broking & Distribution Distribution penetration (% of total client base of 1.32 mn) Traction in new client addition driven by Franchisee and retail channel i.e. ~1,24,000 clients (+10%) in 9MFY20. Retail Distrib
Slide 24: Broking & Distribution – Strong growth in Volume & Distribution AUM
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Broking & Distribution – Strong growth in Volume & Distribution AUM ]J ]_M__O _ T l DP AUM growth trend (Rs bn) Rising Distribution AUM 634 Distribution AUM (Rs bn) Distribution Net Sales (Rs bn) 607 590 CAGR: 27% 582 104 450 35 96 90 75 227 256 44 17 15 16 1
Slide 25: Investment Banking
,,�1,1 EXP;;;,/. INVESTMENT BANKING [�]r]l-----tMr"o_T_L_A_ I _O_s L _W_....., A L YEARS MARQUEE DEALS Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) Revenues 27 50 -47% 83 - 112 235 -52% Operating Costs 53 78 -32% 59 -10% 167 189 -12% EBITDA -26 -28 - 24 -55 46 - QIP
Slide 26: Home Finance
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V HOME FINANCE ]J ]_M__O _ T l Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ% 9MFY20 9MFY19 YoY% ARC deal garnered lenders confidence, Net Interest Income (NII) 526 523 1% 545 -3% 1,648 1,798 -8% resulting into lower Total Income 540 556 -3% 568 -5% 1,70
Slide 27: Home Finance – Asset quality trend
#." EXP�� [�·,_M_o__ T L_A1__O_s L _w__ A L Home Finance – Asset quality trend YEARS ECL Provisioning details MOHFL’s GNPA and NNPA trend Particulars (Rs mn) Q3FY20 GNPA NNPA 10.4% Stage 1 & 2 36,854 9.3% GNPA for new loan book (sourced from % portfolio in stage 1 & 2 96.98% 8.7% Apr-18) stands at 7
Slide 28: Home Finance
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Home Finance ]J ]_M__O _ T l Fruition of revival efforts visible with positive trends in new loans Loan book and disbursement trend sourced from Apr-18 Loan Book (Rs mn) Disbursement (Rs mn) 700 Only 11 cases in NPA pool out of ~4500 cases disbursed. 48,3
Slide 29: Home Finance
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Home Finance ]J ]_M__O _ T l Low gearing Average ticket size is Rs 0.8 mn, with loans extended to more than Leverage (x) ~47,000 families, as MOHFL is focused on the affordable housing 5.0 segment with no exposure to builder finance. 4.3 3.6 Capital infus
Slide 30: Home Finance – Strong liability management
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Home Finance – Strong liability management ]J ]_M__O _ T l Liability mix based on rates (%) Average tenor of outstanding borrowing (months) Average Tenure of Outstanding Borrowings (months) (Residual) Floating Rate Liabilities (%) Fixed Rate Liabilities (%) 4
Slide 31: Home Finance
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Home Finance ]J ]_M__O _ T l Infrastructure & Resources Traction in Login to sanction ratio 1400 120 Branch Employees 125 Sanction to logins Disbursements to sanctions 120 1300 113 111 115 110 78% 80% 1200 1273 105 70% 67% 71% 70% 85% 67% 1100 1174 1150 100 6
Slide 32: Fund Based Investments
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V FUND BASED INVESTMENTS ]J ]_M__O _ T l Total quoted equity Particulars (Rs mn) Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) 9MFY20 9MFY19 YoY (%) investment including MTM gains was Rs 16.6 Revenues 545 565 -4% 270 102% 1,154 56 - bn as of 9MFY20. PAT 547 538 2% 520 5
Slide 33: Fund Based investments – Skin in the game
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Fund Based investments – Skin in the game ]J ]_M__O _ T l Skin in the game in AMC Skin in the game in PE AMC AUM (Rs bn) Sponsor & Promoter AUM in AMC (Rs bn) PE AUM (Rs bn) Sponsor Commitment in PE (Rs bn) 4.9 27 401 66 Unrealised gain from quoted equity inv
Slide 34: Safe Harbour
#�'.!.�E.f� [�YEARS L_A__ L O_S_\-A_L_ V Safe Harbour ]J ]_M__O _ T l 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 re
Slide 35: For any query, please contact
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
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