Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q4 FY21 Earnings Presentation
51 slides from Motilal Oswal Financial Services's earnings presentation, Apr 29, 2021
Slide 1: Exchange filing cover letter
April 29, 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: Investor(s)/Analyst(s) Presentation – Financial
Slide 2: Earnings Presentation Q4FY21 & FY21
Motilal Oswal Financial Services Ltd Earnings Presentation | Q4FY21 & FY21 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET
Slide 3: Key Highlights, Financials, Businesses
Page 3-5 Key Highlights Page 6-9 Financials Page 10-38 Businesses
Slide 4: Key Highlights for FY21
Key Highlights for FY21 Highest ever Highest ever Highest ever Net worth and Highest ever AMC, annual Balance Sheet Gains on Fund Distribution Revenue and size crossing based Wealth and Profit Rs 100 bn Investments DP AUM mark Highest ever Highest ever Highest ever Highest ever NIM led by New Client
Slide 5: Diversified business model led to largest ever profitability
Diversified business model led to largest ever profitability Motilal Oswal Financial Services FUND BASED CAPITAL MARKETS ASSET MANAGEMENT HOUSING FINANCE INVESTMENTS Highest ever new AMC AUM stood at Rs Strong traction in Highest ever gain on clients addition +150% 457 bn, +54% YoY in disbur
Slide 6: 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 92% in FY21 5% in FY21 Consolidated 169% in FY21 38% in FY21 38% in FY21 (6% of NWE) (23% of NWE) (3% of NWE) (68% of NWE) Asse
Slide 7: Consolidated Financials – Revenue Mix
Consolidated Financials – Revenue Mix Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Broking 5,131 3,381 52% 4,307 19% 17,088 12,249 40% Investment Banking 5 9 -47% 2 129% 30 121 -75% Asset Management 1,831 1,316 39% 1,291 42% 5,320 5,561 -4% Private Equity 245 283 -14% 2
Slide 8: Consolidated Financials – PAT Mix
Consolidated Financials – PAT Mix PAT (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Broking 834 453 84% 769 9% 3,030 1,877 61% Investment Banking -32 -37 - -29 - -118 -87 - Capital Markets 802 416 93% 740 8% 2,912 1,789 63% Asset Management 691 357 94% 382 81% 1,602 1,601 - Private
Slide 9: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs bn) FY21 FY20 Sources of Funds Net Worth 44.3 30.9 Borrowings (1) 56.9 46.3 Minority Interest 0.6 0.4 Total Liabilities 101.8 77.5 Application of Funds Fixed assets (net block) 3.5 3.3 Investments 39.2 30.9 Loans and Advances (2) 45.2 40.8 Net current asset
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: 29% 85 39.2 29.0 26.8 23.2 43 19.3 12.5 25 10.9 20 18 12 6.3 3.6 2.9 1.7 1.8 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Revenue Mix PAT Mix Capital Market Asset & Wealth Mgt
Slide 11: Businesses Building Scale
Businesses Building Scale AMC AUM growth trend (Rs bn) Wealth AUM growth trend (Rs bn) 253 CAGR: 34% 457 CAGR: 31% 389 356 175 297 147 156 203 101 64 105 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) 1,184 CAGR: 36% CAGR
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 10.0 50 to liquid Net Worth: CAGR: 23% (post buyback) 9.0 45 • Helped to “seed” our 8.0 6.8 40 new businesses, which 7.0 35 are scalable, high-RoE 6.0 4.9 30 opportunities. 5.0 25 • Serve as highly liquid 4
Slide 13: Growth levers for businesses and performance
Growth levers for businesses and performance GROWTH DRIVERS BROKING & DISTRIBUTION ASSET MANAGEMENT WEALTH MANAGEMENT HOUSING FINANCE Benefitting from Industry Expanded Sales Expanding products Incremental focus on consolidation force with 20+ across asset classes. ramp-up sales. 15+ prime
Slide 14: Broking & Distribution
BROKING & DISTRIBUTION Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Market share Revenues 5,131 3,381 52% 4,307 19% 17,088 12,249 40% improved by 30 bps - Brokerage 3,482 2,202 58% 2,939 18% 11,858 7,607 56% YoY to 2.7% - Distribution 334 263 27% 266 25% 1,011 1,094 -8%
Slide 15: Broking & Distribution – Strong business performance
Broking & Distribution – Strong business performance Retail Broking & Distribution Institutional Broking Around 8 lakh unique logins were witnessed in FY21, Online business Institution broking team wins big in Asiamoney poll 2020. witnessed 60%+ turnover during FY21 Ranked #1 Local Brokerage
Slide 16: Broking & Distribution – Strong growth in Client acquisition
Broking & Distribution – Strong growth in Client acquisition Active Clients (mn) MOFSL Broking ADTO (Ex-prop, Rs bn) Cash ADTO F&O ADTO 0.56 598 CAGR: 28% CAGR: 49% 440 0.38 0.31 0.32 274 566 0.21 235 0.17 174 411 137 85 216 250 59 121 159 51 74 8 11 15 15 19 29 24 32 FY16 FY17 FY18 FY19 FY20 FY21 F
Slide 17: Broking & Distribution – Strong growth in Distribution AUM
Broking & Distribution – Strong growth in Distribution AUM DP AUM growth trend (Rs bn) Rising Distribution AUM (Rs bn) CAGR: 36% 1,184 CAGR: 48% 128 96 90 75 607 590 450 468 44 256 18 FY16 FY17 FY18 FY19 FY20 FY21 FY16 FY17 FY18 FY19 FY20 FY21 Distribution AUM Mix SIP AUM and Live SIP count AUM (Rs
Slide 18: Broking & Distribution- Digital Growth Leading the Way
Broking & Distribution- Digital Growth Leading the Way 17
Slide 19: Broking & Distribution- Our Digital Journey
Broking & Distribution- Our Digital Journey EARLY DIGITIZATION TECHNOLOGY EXPANDING THE AI PERSONALIZATION, INITIATIVES PROMINENCE DIGITAL FOOTPRINT ADVANCED PRODUCTS Till 2008 2008-2014 2014-2017 2018-2019 2020 Branch & Partner 1st Gen Mobile AI Powered 10+ Robo Powered 3rd Gen App & Web
Slide 20: Broking & Distribution- Digital Ecosystem across Client Life Stage
Broking & Distribution- Digital Ecosystem across Client Life Stage 19
Slide 21: Broking & Distribution- Digital to the core of the company
Broking & Distribution- Digital to the core of the company 20
Slide 22: Investment Banking
INVESTMENT BANKING DEALS Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Revenues 5 9 -47% 2 129% 30 121 -75% QIP - Rs 177 bn Operating Costs 40 55 -28% 37 9% 167 223 -84% EBITDA -35 -47 - -35 - -137 -101 - PBT -39 -48 - -38 - -149 -112 - QIP - Rs 150 bn PAT -32 -37 - -29
Slide 23: Asset Management
ASSET MANAGEMENT Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) AMC Closing AUM Avg. AUM (bn) 444 385 15% 409 8% 389 387 1% Rs 457 bn,+54% YoY in Total Revenues 1,831 1,316 39% 1,291 42% 5,320 5,561 -4% FY21 -Mutual Fund (Net) 364 264 38% 315 16% 1,177 1,275 -8% -Alternat
Slide 24: Asset Management
Asset Management Market share in MF Equity AUM continued to remain stable at 1.8% in Q4FY21. Strengthen sales vertical with around 20 sales employees added in FY21 including some senior level hiring. Branch network has also expanded by adding 5 branches in FY21 taking total branch count to 38.
Slide 25: 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: 34% 457 14% 16% 14% 10% 18% 389 27 356 24% 28 29% 27% 27% 26% 24 297 147 160 19 25% 203 150 22% 19% 21% 21% 5 116 105 105 281 183 200 35%
Slide 26: Asset Management – Potential levers to scale profitability
Asset Management – Potential levers to scale profitability AMC EBITDA Margin and Opex to AUM trend MOAMC profitability trend PAT (Rs mn) PAT to AAUM (bps) Op. Cost to Avg AUM (bps) EBITDA Margin (%) 42 41 60 40% 39 39 38% 45% 51 38% 32 32 40% 50 43 33% 35% 40 30% 22% 27 30 30 20% 25% 30 33 20% 20 15
Slide 27: Asset Management – SIP Performance
Asset Management – SIP Performance MOMF SIP AUM of inflows and SIP market share MOMF SIP proportion to SIP flows 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% 26.1% 26.1% 1.55% 26.1% 24.7% 1.50% 22.6% 22.9% 23.5%
Slide 28: Private Equity & Real Estate
PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Committed investment Total Revenues 245 283 -14% 266 -8% 998 1,039 -4% AUM till date stands at Rs 66 bn Operating Cost 146 179 -18% 156 -7% 604 639 -5% EBITDA 99 104 -5% 110 -10% 394 400 -1% PBT 9
Slide 29: PE & RE – Fund performance and allocation
PE & RE – Fund performance and allocation MOPE Funds Performance MOPE Funds- Sector Allocation No. of Investments 30 Consumer 20% Investments Fully Exited 11 Financial Services 33% Drawdown Rs 24.2 bn Phrama Amount Invested Rs 20.6 bn 17% Niche manufacturing Current Value of Investments Rs 26.0 bn 7
Slide 30: 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 IRR (%) IREF V 47.4% IREF IV IBEF III Rs 11.5 IREF III Rs 23 bn bn IREF II Rs 10.3 bn 26.7% IBEF II Rs 4.9 bn 19.7% 21.2% 21.2% Rs 9.5 bn 16.8% IBEF I Rs 5.5 bn FY07 FY12 FY1
Slide 31: Wealth Management
WEALTH MANAGEMENT Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Ashish Shanker has been elevated as MD & AUM (bn) 253 156 62% 227 12% 253 156 62% CEO of our Wealth Revenues 371 255 45% 330 12% 1,271 1,007 26% Management business Operating Cost 212 232 -9% 224 -5% 888 910
Slide 32: Wealth Management
Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Debt 253 253 CAGR: 31% 227 200 178 38% 175 156 33% 147 156 32% 30% 9% 10% 28% 10% 101 12% 8% 8% 13% 7% 8% 8% 18% 17% 64 17% 17% 17% 34% 34% 33% 32% 27% FY16 FY17 FY18 FY19 FY20 FY21 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Wealth UH
Slide 33: Home Finance
HOME FINANCE Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) Improvement in CoF led Net Interest Income (NII) 690 579 19% 629 10% 2,445 2,224 10% to margin expansion Total Income 771 632 22% 655 18% 2,566 2,332 10% Operating Cost 230 231 - 215 7% 858 956 -10% - Employee Co
Slide 34: Home Finance
Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) Q4FY21 GNPA NNPA Stage 1 & 2 * 34,448 % portfolio in stage 1 & 2 97.82% 2.9% Stage 3 766 2.3% 2.2% % portfolio in Stage 3 2.18% 1.8% 1.8% 1.6% ECL Provision % Stage 1 & 2 1.32% 1.4% 1.5% 1.3% 1.2% Total Assets 35,1
Slide 35: 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% 38% 35% 50% 45% 10.1% 10.3% 10.2% 9.3% 6.1% 4.9% 4.8% 5.4% 62% 65% 50%
Slide 36: Home Finance
Home Finance Conservative LTV and FOIR Customer segment mix and Product mix LTV FOIR 10% 60% 26% 59% 59% 20% 57% 50% 45% 8% 8% 25% 4% 4% 44% 43% 44% 43% New Purchase Self-Construction Salaried- Doc Salaried- Cash Resale Composite SE- Assessed SE- Doc FY18 FY19 FY20 FY21 Home Improv./Ext. Others Stat
Slide 37: Home Finance
Home Finance Opex and Cost to Income trend Net Worth (in mn) and Net D/E Net Worth (Rs mn) Net Leverage (x) Opex (Rs mn) Cost to Income 55% Total cumulative capital 290 44% 9,500 infusion at Rs 8.5 bn 6.0 45% 5.0 270 37% 36% 36% 9,000 4.3 5.0 33% 250 30% 35% 8,500 3.2 4.0 230 25% 2.8 8,000 3.0 210 1
Slide 38: Fund Based Investments
FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q4FY21 Q4FY20 YoY (%) Q3FY21 QoQ (%) FY21 FY20 YoY (%) investment including MTM gains was Rs 21.8 Revenues 3,029 -3,754 - 2,523 20% 9,072 -2,585 - bn as of FY21. PAT 2,645 -3,520 - 2,112 25% 7,788 -2,121 - Fund Based OCI 1,233 -1,320 - 9
Slide 39: 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) 36 7 457 66 Strong Growth in investments over the years Investment at cost Gain Rs bn CAGR: 31% 31.0 1
Slide 40: Environment Social Governance Initiatives
ENVIRONMENT SOCIAL GOVERNANCE INITIATIVES 39
Slide 41: Environment- committed towards a better future
Environment- committed towards a better future WASTE REDUCE MANAGEMENT Use of LED lights which consumes 45% less Dry and wet waste segregation electricity; office space is provided with motion IT wastes are outsourced to vendor which sensors to save electricity disposes off the wastes as per p
Slide 42: Social Initiatives- Culture of giving
Social Initiatives- Culture of giving EDUCATIONAL COVID 19 RESPONSE JOY OF GIVING INITIATIVES Contribution to PM and CM Joy of Giving: As part of Joy Inaugurated Motilal Oswal- cares fund. of Giving Week, employees KISS Residential School and well-wishers (Balangir, Odisha) which will Suppor
Slide 43: Social- focus on employee well being & growth
Social- focus on employee well being & growth EMPLOYEE LEARNING & TALENT ATTRACTION ENGAGEMENT DEVELOPMENT & MANAGEMENT Paid paternity leave, paid Learning through Virtual Virtual hiring, Hire-Train- maternity leave, Work from Platform: Capsular and Byte Deploy Program Home size learning MT
Slide 44: Governance- reflecting responsible behaviour
Governance- reflecting responsible behaviour SUPERVISORY RISK MANAGEMENT COMPLIANCE/POLICIES BOARD Diverse Board Composition Risk Management Policy Corporate Governance 50% Independent Director in Enterprise Risk Management Code of Conduct Policy Holding Company and at least Framework
Slide 45: Motilal Oswal Home Finance- ESG Initiatives
Motilal Oswal Home Finance- ESG Initiatives ENVIRONMENTAL SOCIAL GOVERNANCE We ensure that we fund to Set standard practices is 30% Independent Directors projects which is on non followed across all branches Corporate Governance agriculture land & non forest to ensure safety of employees lan
Slide 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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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