Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q2 FY2021 Earnings Presentation
40 slides from Motilal Oswal Financial Services's earnings presentation, Oct 30, 2020
Slide 1: Exchange filing cover letter for investor presentation
October 30, 2020 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: Earnings Presentation Q2FY21 & H1FY21
Motilal Oswal Financial Services Ltd Earnings Presentation | Q2FY21 & H1FY21 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET
Slide 3: Key Highlights, Financials, Businesses
Page 3-4 Key Highlights Page 5-10 Financials Page 11-33 Businesses
Slide 4: Diversified business model
Diversified business model Motilal Oswal Financial Services FUND BASED CAPITAL MARKETS ASSET MANAGEMENT HOUSING FINANCE INVESTMENTS Market share improved AMC AUM stood at Rs New MD & CEO on- Total quoted equity by 80bps YoY to 3.1% 386 bn, +10% QoQ in boarded investment including Q2FY21 Co
Slide 5: Business-wise RoE mix
Business-wise RoE mix Group RoE* Segment-wise RoE, with % of net worth employed (NWE) Asset & Wealth Fund based MOFSL Capital Markets Housing Finance Management investments 100% in H1FY21 4% in H1FY21 Consolidated 78% in H1FY21 37% in H1FY21 36% in H1FY21 (11% of NWE) (27% of NWE) (6% of NWE) (57% o
Slide 6: Consolidated Financials – Revenue Mix
Consolidated Financials – Revenue Mix Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Broking 4,216 3,007 40% 3,434 23% 7,650 5,785 32% Investment Banking 20 83 -76% 4 - 23 86 -73% Asset Management 1,162 1,364 -15% 1,036 12% 2,198 2,807 -22% Private Equity 268 255 5% 2
Slide 7: Consolidated Financials – PAT Mix
Consolidated Financials – PAT Mix PAT (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Broking 815 540 51% 613 33% 1,427 941 52% Investment Banking -18 12 - -39 - -57 -27 - Capital Markets 797 551 44% 573 39% 1,370 913 50% Asset Management 290 468 -38% 240 21% 530 830 -36% Private
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs bn) H1FY21 FY20 Sources of Funds Net Worth 34.9 30.9 Borrowings (1) 46.4 46.3 Minority Interest 0.5 0.4 Total Liabilities 81.7 77.5 Application of Funds Fixed assets (net block) 3.4 3.3 Investments 25.9 30.9 Loans and Advances (2) 41.6 40.8 Net current asse
Slide 9: Financial Performance
Financial Performance Revenue Trend Profitability Trend Revenues (Rs bn) PAT (Rs bn) EPS (Rs) 43 CAGR: 21% 29.0 26.8 23.1 31 19.3 25 17.1 20 18 10.9 12 1.7 3.6 6.3 2.9 1.8 4.6 FY16 FY17 FY18 FY19 FY20 H1FY21 FY16 FY17 FY18 FY19 FY20 H1FY21 Revenue Mix Operating Profit Mix Capital Market Asset & Weal
Slide 10: Businesses Building Scale
Businesses Building Scale AMC AUM growth trend (Rs bn) Wealth AUM growth trend (Rs bn) CAGR: 30% 389 386 CAGR: 25% 200 356 175 297 156 147 203 101 64 105 FY16 FY17 FY18 FY19 FY20 H1FY21 FY16 FY17 FY18 FY19 FY20 H1FY21 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) 723 111 CAGR: 16
Slide 11: Financial Performance – Growth Drivers
Financial Performance GROWTH DRIVERS BROKING & DISTRIBUTION ASSET MANAGEMENT WEALTH MANAGEMENT HOUSING FINANCE ADTO grew 70% YoY with Traction in gross Strong traction in gross GNPA /NNPA at rise in market share in flows; net flows and net sales. 1.6%/1.2% respectively Q2FY21 declined in lin
Slide 12: Broking & Distribution
BROKING & DISTRIBUTION Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Market share Revenues 4,216 3,007 40% 3,434 23% 7,650 5,785 32% improved by 80 bps - Brokerage 3,028 1,813 67% 2,409 26% 5,437 3,476 56% YoY to 3.1%; multi- - Distribution 244 297 -18% 166 47% 410 5
Slide 13: Broking & Distribution
Broking & Distribution Retail Broking & Distribution Distribution business Penetration Mobile app witnessed more than 3 lakh monthly logins for the first time. 54% of clients trade through MO Trader app. Retail clients (mn) Retail Distribution Penetration to Total clients(%) New website and mo
Slide 14: Strong growth in Volume and Client acquisition
Broking & Distribution – Strong growth in Volume and Client acquisition MOFSL Broking ADTO (Ex-prop, Rs bn) Rising share of Active Clients (mn) Cash ADTO F&O ADTO Active clients (mn) Market Share (Active clients) 380 CAGR: 23% CAGR: 41% 235 224 3.7% 3.6% 3.7% 3.5% 3.2% 3.2% 174 353 137 85 216 208 59
Slide 15: Strong growth in Distribution AUM
Broking & Distribution – Strong growth in Distribution AUM DP AUM growth trend (Rs bn) Rising Distribution AUM (Rs bn) 723 111 CAGR: 16% CAGR: 50% 96 607 590 90 75 450 468 44 256 18 FY16 FY17 FY18 FY19 FY20 H1FY21 FY16 FY17 FY18 FY19 FY20 H1FY21 Distribution AUM Mix SIP AUM and Live SIP AUM (Rs bn)
Slide 16: Investment Banking
INVESTMENT BANKING DEALS Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Revenues 20 83 -76% 4 - 23 86 -73% QIP - Rs 177 bn Operating Costs 36 59 -38% 54 -33% 90 114 -53% EBITDA -16 24 - -51 - -67 -28 - PBT -20 21 - -52 - -72 -35 - QIP - Rs 150 bn PAT -18 12 - -39 - -5
Slide 17: Asset Management
ASSET MANAGEMENT Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) AMC Closing AUM Avg. AUM (bn) 375 370 1% 326 15% 350 379 -8% Rs 386 bn,+10% QoQ Total Revenues 1,162 1,364 -15% 1,036 12% 2,198 2,807 -22% in Q2FY21 -Mutual Fund (Net) 258 333 -23% 240 8% 498 675 -26% -Al
Slide 18: Asset Management
Asset Management Market share in MF Equity AUM continued to remain stable at 1.9% in Q2FY21. Overall industry witnessed a fall in equity flows. Efforts in offshore marketing have yielded modest results as of now. We remain committed to raise AUMs from offshore going forward. Launched MO Multi
Slide 19: Asset Management – Potential levers to scale business
Asset Management – Potential levers to scale business MOAMC AUM breakup and growth trend (Rs bn) MOMF AUM sourcing mix MF AUM PMS AUM AIF AUM IFAs Direct NDs Wealth Captive 389 386 8% 7% 7% 6% CAGR: 30% 356 12% 11% 28 23 14% 11% 8% 24 15% 17% 297 17% 18% 18% 23% 160 19 139 19% 150 20% 23% 203 5 116
Slide 20: Asset Management – Potential levers to scale profitability
Asset Management – Potential levers to scale profitability AMC EBITDA and Opex to AUM trend MOAMC profitability trend Op. Cost to Avg AUM (bps) EBITDA Margin (%) PAT (Rs mn) PAT to AAUM (bps) 42 60 50% 39 39 51 40% 38% 50 43 32 32 33% 34% 40% 30 40 27 30 30% 22% 30 20% 33 31 20% 20 10 10% 264 498 1,
Slide 21: Asset Management – Granularity of MF AUM
Asset Management – Granularity of MF AUM 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 1.60% 1.55% 33.2% 31.4% 1.50% 29.4% 29.5% 27.0% 28.0% 24.9%
Slide 22: Private Equity & Real Estate
PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Committed investment Total Revenues 268 255 5% 219 23% 487 495 -2% AUM till date stands at Rs 65 bn Operating Cost 158 159 0% 144 10% 302 300 1% EBITDA 110 96 14% 75 47% 185 195 -5% PBT 107 90
Slide 23: PE & RE – Fund performance and allocation
PE & RE – Fund performance and allocation MOPE Funds Performance MOPE Funds- Sector Allocation No. of Investments 30 Consumer Investments Fully Exited 10 20% Financial Services 33% Drawdown Rs 20.4 bn Phrama Amount Invested Rs 18.2 bn 17% Niche manufacturing Current Value of Investments* Rs 24.2 bn
Slide 24: PE & RE – Exits from funds provide visibility over next decade
PE & RE– Exits from 7 funds provides strong visibility over next decade Launch period of PE & RE Funds QGLP investments delivering higher IRR Investment Amt(Rs Mn) IRR (%) 61% 500 480 IREF IV 450 IBEF III Rs 11.5 bn 400 400 400 400 IREF III Rs 23 bn 37% 33% IREF II Rs 10.3 bn 29% 30% Rs 4.9 bn 26% I
Slide 25: Wealth Management
WEALTH MANAGEMENT Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) Wealth AUM AUM (bn) 200 181 10% 178 13% 200 181 10% at an all-time high at Rs Revenues 349 279 25% 221 58% 570 500 14% 200 bn, up 13% QoQ Operating Cost 236 261 -10% 217 9% 453 472 -4% EBITDA 113 17 - 4
Slide 26: Wealth Management
Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Debt 200 200 CAGR: 25% 181 189 180 175 156 156 147 28% 32% 31% 31% 11% 28% 101 10% 12% 12% 8% 8% 9% 8% 13% 64 20% 8% 17% 20% 19% 17% 28% 29% 33% 34% 33% FY16 FY17 FY18 FY19 FY20 H1FY21 Q1FY20 Q2FY20 Q3FY20 Q4FY20 H1FY21 Wealth
Slide 27: Home Finance
HOME FINANCE Arvind Hali joined as Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ% H1FY21 H1FY20 YoY (%) MD & CEO; Net Interest Income (NII) 558 542 3% 568 -2% 1,126 1,119 1% Amar Bahl joined as Total Income 563 565 0% 578 -3% 1,141 1,164 -2% Deputy MD & COO Operating Cost 202 249 -19% 210 -4%
Slide 28: Home Finance
Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) Q2FY21 GNPA NNPA PCR Stage 1 & 2 36,048 120% 10.4% 100% % portfolio in stage 1 & 2 98.36% 87% 100% Stage 3 599 7.8% 66% 80% 62% % portfolio in Stage 3 1.64% 53% 60% ECL Provision % Stage 1 & 2 1.22% 42% 3.0% 40% To
Slide 29: Home Finance
Home Finance Loan book and Disbursements trend MOHFL board has appointed Mr. Arvind Hali as MD & CEO and Mr. Amar Bahl as Deputy MD & COO. Both are industry veterans with Loan Book (Rs mn) Disbursement (Rs mn) 30,000 over 20+ years of experience in mortgage industry. 48,320 ATS of Rs 0.88 mn 26,00
Slide 30: Home Finance – Strong liability management
Home Finance – Strong liability management NIM expansion led by traction in CoF & Yields Liability mix based on rates (%) NIM (%) Yields (%) Cost of fund (%) Floating Rate Liabilities (%) Fixed Rate Liabilities (%) 14.0% 13.9% 14.3% 14.1% 14.3% 45% 38% 40% 50% 10.1% 10.3% 10.2% 10.4% 9.5% 4.9% 4.8%
Slide 31: Home Finance
Home Finance LTV of 59% and FOIR of 43% Customer segment mix and Product mix LTV FOIR 10% 60% 28% 59% 59% 19% 57% 51% 45% 7% 26% 8% 4% 44% 43% 44% 43% 1% New Purchase Self-Construction Salaried- Doc Salaried- Cash Resale Composite SE- Assessed SE- Doc FY18 FY19 FY20 H1FY21 Home Improv./Ext. Others S
Slide 32: Home Finance
Home Finance Opex and Cost to Income trend Capital adequacy ratio trend Opex (Rs mn) Cost to Income 60 % 48% 290 49% 45% 270 43% 44% 44% 50 % 38% 40% 250 36% 37% 36% 36% 40 % 31% 29% 230 30 % 210 274 258 249 20 % 190 237 239 237 231 210 202 10 % 170 150 0% Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q
Slide 33: Fund Based Investments
FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q2FY21 Q2FY20 YoY (%) Q1FY21 QoQ (%) H1FY21 H1FY20 YoY (%) investment including MTM gains was Rs 14.3 bn as of Q2FY21. Revenues 2,035 295 - 1,485 37% 3,521 634 - PAT 1,728 525 - 1,303 33% 3,031 849 - Note: Fund based revenues and PAT exc
Slide 34: 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) 19 7 386 65 Growth in investments over the years Rs bn CAGR: 21% 21.3 17.4 17.9 17.5 11.3 8.1 FY16 FY1
Slide 35: Awards & Accolades
Awards & Accolades Asia Money Brokers Poll 2019 No. 2 Local Brokerage MOFSL gets inducted Motilal Oswal wins MOPWM wins Excellent No. 1 Overall Sales, in the HALL OF FAME Multiple Awards at in designing learning No. 1 Sales Trading at the 10th Financial the PMS AIF World content award at the Team, A
Slide 36: MOFSL Journey – 33 Years of Wealth Creation
MOFSL Journey - Launched India’s digitally first NFO amid Covid-19 crisis - Motilal Home Finance rating upgraded to AA- /Stable by CRISIL - Reach expands to - Asset - Expansion in AMC & 2018 - Group AUM Rs over 100 business 2003 2010 Management 1 tn. Broking business locations and launches its - Rev
Slide 37: Management team
Management team Raamdeo Agrawal, Chairman Arvind Hali, CEO- Housing Finance A CA by qualification, Mr Agarw al started MOFSL along w ith Mr Motilal Mr Hali is an MMS post graduate from the University of Mumbai and has Osw. al in 1987. He is Chair man of MOFSL and also the co-founder of more MOFSL. A
Slide 38: 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
Slide 39: 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 40: 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
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