Motilal Oswal Financial Services Limited · NSE:MOTILALOFS

Motilal Oswal Financial Services — Q3 FY2022 Earnings Presentation

53 slides from Motilal Oswal Financial Services's earnings presentation, Jan 27, 2022

  1. Slide 1: Exchange filing cover letter for investor presentation

    January 27, 2022 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

  2. Slide 2: Earnings Presentation Q3FY22 & 9MFY22

    Motilal Oswal Financial Services Ltd Earnings Presentation | Q3FY22 & 9MFY22 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH ALL BIZ OFFER HUGE HEADROOM FOR GROWTH

  3. Slide 3: Key Highlights, Financials, Businesses

    Page 3-4 Key Highlights Page 5-8 Financials Page 9-44 Businesses

  4. Slide 4: Diversified business model - Highest ever quarterly performance

    Diversified business model- Highest ever quarterly performance Motilal Oswal Financial Services FUND BASED CAPITAL MARKETS ASSET MANAGEMENT HOUSING FINANCE INVESTMENTS  Highest ever quarterly  AMC AUM stood at Rs 507  Disbursements grew by  MTM gain of Rs 3.6 bn broking revenue & profit. bn, +20

  5. 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 170% in 9MFY22 Management 7% in 9MFY22 investments Consolidated 215% in 9MFY22 17% in 9MFY22 31% in 9MFY22 (6% of NWE) (5% of NWE) (20% of NWE) (69% o

  6. Slide 6: Consolidated Financials – Strong sequential profit growth

    Consolidated Financials – Strong sequential profit growth @ 25% Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Capital Markets (Broking, Distribution & IB) 7,259 4,309 68% 6,075 19% 18,440 11,982 54% Asset Management 1,675 1,291 30% 1,472 14% 4,528 3,489 30% Private E

  7. Slide 7: Consolidated Financials – PAT Mix

    Consolidated Financials – PAT Mix PAT (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Capital Markets (Broking, Distribution & IB) 1,476 740 99% 1,211 22% 3,461 2,110 64% Asset Management 528 382 38% 417 27% 1,301 911 43% Private Equity (1) 100 69 46% 37 173% 199 190 5% Wealth Man

  8. Slide 8: Consolidated Balance Sheet

    Consolidated Balance Sheet Particulars (Rs bn) 9MFY22 FY21 Sources of Funds Net Worth 53.8 44.3 Borrowings (1) 56.0 56.9 Minority Interest 0.5 0.6 Total Liabilities 110.4 101.8 Application of Funds Fixed assets (net block) 3.5 3.5 Investments 43.3 39.2 Loans and Advances (2) 48.3 45.2 Net current as

  9. Slide 9: 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 34.8 68 29.0 26.8 23.2 43 19.3 12.5 25 10.0 20 18 6.3 3.6 2.9 1.8 FY17 FY18 FY19 FY20 FY21 9MFY22 FY17 FY18 FY19 FY20 FY21 9MFY22 Revenue Mix PAT Mix Capital Market Ass

  10. Slide 10: Growth Journey During Covid Period

    Growth Journey During Covid Period Operating PAT Trend Growth in Equity Investments PAT (Rs mn) Investments (Rs bn) 2,345 36.1 37.6 1,818 1,865 31.0 32.0 26.0 1,233 1,216 1,291 21.3 1,030 18.6 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Asset Und

  11. Slide 11: Businesses Building Scale

    Businesses Building Scale AMC AUM growth trend PE/RE Commitment AUM & Fund Raise AMC AUM (Rs bn) AUM (Rs bn) Fund Raised (Rs bn) Fee earning AUM 90 at Rs 83 bn 70. 0 CAGR: 21% CAGR: 21% 80 72 60. 0 507 70 64 65 66 434 50. 0 389 60 356 47 37.3 40. 0 50 294 31 40 30. 0 203 30 16.6 20. 0 20 11.1 8.5 10

  12. 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

  13. 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  Multi fold jump in  Expanding products  Focus on hiring RO/RM takes the lead in client Net inflows across asset classes. to ramp up

  14. 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% 80.6 90. 0 30. 0 80. 0 25.5 25. 0 70. 0 60. 0 55.1 20. 0 40.9 50. 0 35.9 14.3 15. 0 40. 0 13.5% 25.4 21.0 30. 0 10. 0 17.2 20. 0 10.3 5.8% 10. 0 5.8 4.0

  15. 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 Active MF- Rs 18 tn 140% MF AUM (Rs tn) MF AUM % of GDP 40 38 40. 0% 35 31 35. 0% 30 30. 0% 84% 24 22 25 21 25. 0% 63% 20 17 15.9% 16.3% 20. 0% 49% 12 12.5% 12.6% 15 11 10.7% 10.9% 15

  16. Slide 16: Capital Markets - Broking, Distribution & IB

    CAPITAL MARKETS- BROKING, DISTRIBUTION & IB Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) New Digital head on- Revenues 7,259 4,309 68% 6,075 19% 18,440 11,982 54% boarded- Vipul Nirwani (ex- Amazon, - Brokerage 4,155 2,939 41% 3,856 8% 11,582 8,376 38% McKinsey) - D

  17. 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 IPO of Metro Brands Limited., acquisition team. QIP of Mold-Tek Packaging Limited and participated i

  18. Slide 18: Broking & Distribution - Growth Journey

    Broking & Distribution- Growth Journey Revenue & PAT Trend Quarterly Broking PAT Trend Revenue (Rs mn) PAT (Rs mn) PAT (Rs mn) 1,465 18,322 4,00 0 17,088 3,50 0 1,200 3,457 3,00 0 12,249 834 11,209 11,334 3,030 2,50 0 815 769 799 2,00 0 613 7,538 483 6,010 1,877 453 1,810 1,50 0 692 1,467 1,00 0 375

  19. Slide 19: Broking & Distribution - Revenue Mix

    Broking & Distribution- Revenue Mix Net Revenue Mix Gross Brokerage Mix Broking Interest Depository Distribution Other Cash F&O Commodity Currency 2% 5% 5% 2% 9% 9% 7% 5% 10% 10% 8% 10% 5% 6% 5% 4% 5% 5% 8% 4% 22% 15% 23% 37% 30% 39% 37% 41% 59% 67% 60% 54% 47% 50% 52% 42% FY19 FY20 FY21 9MFY22 FY19

  20. Slide 20: Broking & Distribution – Strong growth in Client acquisition

    Broking & Distribution – Strong growth in Client acquisition Active Clients Strong growth in Retail Client base Active clients (mn) Retail clients (mn) 0.79 2.60 CAGR: 28% CAGR: 25% 1.97 0.56 1.45 0.38 1.20 0.31 0.32 1.05 0.81 0.21 FY17 FY18 FY19 FY20 FY21 9MFY22 FY17 FY18 FY19 FY20 FY21 9MFY22 Sign

  21. Slide 21: Diversifying Customer Segment & Penetration

    Broking & Distribution – Diversifying Customer Segment & Penetration Median Age of Clients Acquired Customers acquired % below 30 years of age Rising Gen Y & Gen Z 40 40 customer segment 38 50% 35 30 36% 23% 18% 15% FY18 FY19 FY20 FY21 9MFY22 FY18 FY19 FY20 FY21 9MFY22 City wise Acquisition Pin code

  22. Slide 22: Strong growth in Distribution AUM

    Broking & Distribution – Strong growth in Distribution AUM DP AUM growth trend Rising Distribution (Mass Affluent) AUM DP AUM (Rs bn) Distribution AUM (Rs bn) 166 1,959 CAGR: 27% CAGR: 31% 128 1,184 96 90 75 607 590 44 450 468 FY17 FY18 FY19 FY20 FY21 9MFY22 FY17 FY18 FY19 FY20 FY21 9MFY22 Distribut

  23. Slide 23: Unique Diversified Business Model

    Broking & Distribution – Unique Diversified Business Model Retail Broking Business Model Branch Franchisee PCG Digital  98 Branches  Largest Franchisee Network (500+ cities)  Online client acquisition/ advisory  3,400+ Employees  HNI Client Servicing  6500+ Active Partners  700+ Employees  7

  24. Slide 24: Various initiatives to enhance our digital journey

    Broking & Distribution – Various initiatives to enhance our digital journey In the process to launch Subscription Based Research Portal In the process to launch Super Fina App in 3-4 quarters where all financial products will be available on 1 platform with enhanced features UI/UX improvement Enhanc

  25. Slide 25: Asset Management

    ASSET MANAGEMENT Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Avg. AUM (bn) 503 395 28% 486 4% 478 360 33% AMC AUM crossed Rs 500 bn mark -MF 315 228 38% 301 5% 295 203 46% -Alternates 186 165 13% 183 2% 181 155 16% Total Revenues 1,675 1,291 30% 1,472 14% 4,528 3,4

  26. Slide 26: Asset Management

    Asset Management  Distribution reach is expanded by reaching out to more number of IFAs and tie-up with banking channels.  Focus on CAT III long only close ended AIF with AUM of Rs 46 bn (Rs 32 bn AUM + Rs 14 bn commitment).  Favourable response to alternate offerings under AIF strategy, garnered

  27. 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% 16% 507 434 32 24% 389 29% 27% 27% 26% 22% 356 27 28 155 24 294 25% 147 21% 24% 160 19 22% 19% 21% 203 150 5 116

  28. 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 (%) 25% Alternatives Performace 50 43 40% 38% 38% 39% 45% 40% 63% linked 40 33% 33 35% 30

  29. Slide 29: Private Equity & Real Estate – Scaling big

    PRIVATE EQUITY & REAL ESTATE – Scaling big Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Fee earning PE & RE AUM stands at Rs 83 bn Total Revenues 323 266 21% 278 16% 837 754 11% Operating Cost 185 156 18% 174 6% 507 459 11% EBITDA 138 110 25% 103 34% 330 295 12% PBT

  30. 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 Current Value of In

  31. Slide 31: Real Estate

    REAL ESTATE MORE Funds Performance Real Estate Funds No. of Investments 74  IREF II is fully deployed across 14 investments. The Fund has Investments Fully Exited 38 secured 10 complete exits and 1 structured exit and has returned money equalling 134.8% of the Fund Corpus back to Amount Invested Rs

  32. Slide 32: PE & RE – Exits from funds provides strong visibility

    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 45 45.6% IREF IV Rs 10.8 bn Fully IBEF III Rs 11.5 bn exited IREF III Rs 23 bn IREF II Rs 10.3 bn 26.8% IBEF II Rs 4.9 bn 21.0% 20.5% 17.4% 19.4% Rs

  33. Slide 33: Wealth Management – Aiming high

    WEALTH MANAGEMENT- Aiming high Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Wealth AUM AUM (bn) 342 227 51% 315 9% 342 227 51% at an all-time high at Rs 342 bn, up 51% YoY Revenues 593 330 80% 476 24% 1,465 900 63% Operating Cost 290 224 29% 268 8% 783 677 16% EBITD

  34. Slide 34: Wealth Management

    Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Others 342 342 CAGR: 26% 315 288 253 253 37% 227 36% 38% 175 38% 10% 147 156 33% 9% 9% 7% 8% 101 9% 10% 8% 8% 8% 17% 17% 18% 16% 17% 32% 29% 30% 29% 27% FY17 FY18 FY19 FY20 FY21 9MFY22 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Wealth

  35. Slide 35: Wealth Management

    Wealth Management AUM Mix- Q3FY22 Revenue Mix MF PMS, AIF & Structures PE/RE Broking Others Recurring Transactional 40% 60% 9% 49% 45% 53% 48% 56% 57% 42% 18% 51% 55% 47% 52% 17% 44% 43% 14% Recurring AUM Transactional AUM Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 RM Productivity AUM and Revenue per Family

  36. Slide 36: Home Finance

    HOME FINANCE Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) Mr. P H Ravikumar joins MOHFL board (ex- Vastu Net Interest Income (NII) 695 629 10% 694 - 2,004 1,755 14% HFC, Utkarsh SFB, ICICI Total Income 741 655 13% 733 1% 2,208 1,795 23% Bank, BOI, BFIL) Operating Co

  37. Slide 37: Home Finance

    Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) 9MFY22 GNPA NNPA Excluding new RBI Stage 1 & 2 33,422 norm, GNPA and NNPA 4.7% stood at 1.3% and 0.7% % portfolio in stage 1 & 2 96.57% respectively Stage 3 1,188 3.4% 3.3% % portfolio in Stage 3 3.43% 2.9% ECL Pro

  38. Slide 38: 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% 22% 38% 35% 50% 45% 10.1% 10.3% 10.2% 9.3% 8.3% 7.1% 6.1% 4.9% 4

  39. Slide 39: Home Finance - Portfolio Metrics

    Home Finance- Portfolio Metrics Customer Mix Product Mix New Purchase 26% Self-Construction Self Employed Resale 54% 46% 45% 8% Salaried Home Improv./Ext. 4% 5% 3% Composite 10% CF with MORE* Others AUM by Credit History AUM by Ticket Size Upto 0.5 mn Have Credit 32% History 0.5-1 mn 58% 38% 1-1.5 m

  40. Slide 40: Home Finance - Disbursement Trend

    Home Finance- Disbursement Trend Disbursement Trend Conservative LTV and FOIR LTV FOIR Disbursement (Rs bn) 1.9 60% 59% 59% 57% 58% 1.6 1.4 0.9 0.5 44% 44% 43% 43% 43% Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 FY18 FY19 FY20 FY21 9MFY22 State Wise Disbursement– Rising new state contribution Old States Incr

  41. Slide 41: 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 33% 35% 40% 12,0 00 6.0 100 0 35% 5.0 30% 10,0 00 4.3 5.0 800 25% 8,00 0 3.2 4.0 600 2.8 1036 2

  42. Slide 42: Our Customers

    Our Customers Informal Self Employed Informal Self Employed Formal Self Employed Salaried Age 47//Location- Bengaluru Age 28//Location- Ahmedabad Age 43//Location- Jaipur Age 50//Location- Faridabad • Runs his own loading auto • Runs own fast food cart since • Owner of a dhaba in Jaipur; • Cash sala

  43. Slide 43: End To End Digital Solution For Home Loans

    End To End Digital Solution For Home Loans 42

  44. Slide 44: Fund Based Investments

    FUND BASED INVESTMENTS Total equity investment Particulars (Rs mn) Q3FY22 Q3FY21 YoY (%) Q2FY22 QoQ (%) 9MFY22 9MFY21 YoY (%) including alternate funds was Rs 37.6 bn as Revenues 87 2,523 - 3,100 - 4,321 6,043 -28% of 9MFY22. -MF/Alternates 145 2,206 - 1,782 - 3,136 4,588 -32% -PE/RE -163 216 - 1,34

  45. Slide 45: 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) 21 19 7 507 72 Strong Growth in investments over the years Investment at cost Gain Rs bn

  46. Slide 46: MOFSL- ESG Profile

    MOFSL- ESG Profile • Launched online ESG profile (link) platform, a public, consolidated, and searchable profile on MOFSL group website, that summarizes the company’s approach towards sustainability. • Provides insightful and easily accessible information on the impact of group’s activities across t

  47. Slide 47: MOFSL- ESG Initiatives

    MOFSL- 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

  48. Slide 48: Awards & Accolades

    Awards & Accolades Asia Money Brokers Motilal Oswal Wins Motilal Oswal Poll 2021 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

  49. Slide 49: 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

  50. Slide 50: 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

  51. Slide 51: 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

  52. Slide 52: 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

  53. Slide 53: Thank You

    Thank You… For any query, please contact : Shalibhadra Shah Chief Financial Officer 91-22-71934917 / 9819060032 shalibhadrashah@motilaloswal.com Rakesh Shinde Sr. VP–Investor Relations 91-22-71985510 / 9920309311 rakesh.shinde@motilaloswal.com

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