Motilal Oswal Financial Services Limited · NSE:MOTILALOFS

Motilal Oswal Financial Services — Q4 FY20 Earnings Presentation

40 slides from Motilal Oswal Financial Services's earnings presentation, May 11, 2020

  1. Slide 1: Motilal Oswal Financial Services Limited – exchange filing cover letter

    MOTILAL 0SWAL Motilal Oswal Financial Services Limited CIN: L67190MH2005PLC153397 Regd. Off.: Motilal Oswal Tower, Rahimtullah Sayani Road, Opp. Parel ST Depot, Prabhadevi, Mumbai - 400025 Board: +91 22 7193 4200 I 4263 Fax: +91 22 5036 2365 0D\ %6(/LPLWHG 1DWLRQDO6WRFN([FKDQJHRI,QGLD/LPLWHG 3-7RZHU

  2. Slide 2: Earnings Presentation | Q4FY20 and FY20

    Motilal Oswal Financial Services Ltd Earnings Presentation | Q4FY20 and FY20 BUSINESSES BUILDING SCALE FOCUS ON PROFITABLE GROWTH STRONG LIQUIDITY ON BALANCE SHEET

  3. Slide 3: Key Highlights, Financials, Businesses

    Page 3-5 Key Highlights Page 6-11 Financials Page 12-36 Businesses

  4. Slide 4: Diversified business model

    Diversified business model Motilal Oswal Financial Services FUND BASED ASSET MANAGEMENT CAPITAL MARKETS HOUSING FINANCE INVESTMENTS  AMC AUM stood at Rs  Market share remained  Rating upgrade from  Total quoted equity 297 bn in FY20 stable at 2.5% CRISIL to AA- (Stable) in investment including 

  5. Slide 5: Business-wise RoE mix

    Business-wise RoE mix Group Operating RoE* Segment-wise RoE, with % of net worth employed (NWE) Asset & Wealth MOFSL Capital Markets Housing Finance Management 75% in FY20 5% in FY20 Consolidated 102% in FY20 32% in FY20 (17% of NWE) (67% of NWE) (15% of NWE) Asset & Wealth MOFSL Capital Markets Hou

  6. Slide 6: Awards & Accolades

    Awards & Accolades Asia Money Brokers Poll 2019 Business Leadership MOPWM wins Best No. 2 Local Brokerage MOFSL gets inducted Award for excellence Boutique Wealth No. 1 Overall Sales, in the HALL OF FAME in Franchising and Manager- India for No. 1 Sales Trading at the 10th Financial Business Develop

  7. Slide 7: Consolidated financials – Revenue mix

    Consolidated financials – Revenue mix Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) Asset Management 1,316 1,396 -6% 1,439 -9% 5,561 5,786 -4% Private Equity 313 320 -2% 261 20% 1,069 1,104 -3% Wealth Management 255 258 -1% 252 1% 1,007 1,088 -7% Broking 3,381 2,809 20%

  8. Slide 8: Consolidated financials – PAT Mix

    Consolidated financials – PAT Mix PAT (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) Asset Management 357 335 6% 414 -14% 1,601 1,467 9% Private Equity 44 77 -43% 68 -35% 219 301 -27% Wealth Management 14 29 -52% 34 -60% 61 140 -57% Asset & Wealth 415 441 -6% 516 -20% 1,881 1,908 -1%

  9. Slide 9: Consolidated balance sheet

    Consolidated balance sheet Particulars (Rs bn) FY20 FY19 Sources of Funds Net Worth 30.8 30.5 Borrowings (1) 46.3 51.6 Minority Interest 0.4 0.4 Total Liabilities 77.5 82.5 Application of Funds Fixed assets (net block) 3.3 3.0 Investments 30.9 26.9 Loans and Advances (2) 40.8 48.8 Net current assets

  10. Slide 10: Financial performance

    Financial performance Revenue trend Reported Profitability trend Revenues (Rs bn) PAT (Rs bn) 43 EPS (Rs) CAGR: 21% 29.0 26.8 23.1 19.3 25 20 18 10.9 12 1.7 3.6 6.3 2.9 1.8 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Profitability mix ROE trend on Reported Profits Capital Market Asset & Wealth

  11. Slide 11: Businesses building scale

    Businesses building scale AMC AUM growth trend (Rs bn) Wealth AUM growth trend (Rs bn) 389 AUM 356 175 AUM CAGR: 30% 156 CAGR: 25% 297 147 203 101 64 105 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) AUM 607 590 AUM 96 CAGR: 16% 9

  12. Slide 12: Growth drivers

    Financial performance GROWTH DRIVERS ASSET MANAGEMENT WEALTH MANAGEMENT BROKING & DISTRIBUTION HOUSING FINANCE  Positive net flows for  Business continues to  ADTO grew 35% YoY with be under Investment  Normalcy in consecutive three rise in cash market share profitability restored in mode. quart

  13. Slide 13: Asset Management

    ASSET MANAGEMENT Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY(%) AUM (bn) 297 389 -24% 401 -26% 297 389 -24% AMC AUM Total Revenues 1,316 1,396 -6% 1,439 -9% 5,561 5,786 -4% Rs 297 bn in FY20 -Mutual Fund (Net) 264 337 -22% 337 -22% 1,275 1,457 -13% -Alternates (Net) 504 43

  14. Slide 14: Asset Management

    Asset Management  SIP inflows in FY20 was at Rs 16.3 bn. Average SIP ticket size at Rs 3,700 per month is higher than the industry average of Rs 2,750. Our SIP market share and proportion to total inflows are steady.  Market share in MF Equity AUM continued to remain stable at 1.9% in FY20. Overal

  15. Slide 15: Asset Management – Potential levers to scale business

    Asset Management – Potential levers to scale business MOAMC AUM breakup and growth trend (Rs bn) AUM sourcing mix MF AUM PMS AUM AIF AUM IFAs Direct NDs Wealth Captive 389 7% 7% 355 12% 11% 8% 28 14% 11% AUM 24 15% 17% 297 17% CAGR: 30% 18% 18% 160 19 19% 150 20% 23% 203 116 35% 38% 32% 105 105 38%

  16. Slide 16: 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) 60 45% 43 40% 51 38% 39 40% 50 33% 32 43 35% 32 39 40 30% 33 22% 31 27 25% 30 20% 20% 20 15% 10% 10 5% 264 4

  17. Slide 17: 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 1.43% 1.43% 1.42% 1.42% 29.4% 29.5% 27.0% 28.0% 1.41% 1.41%

  18. Slide 18: Private Equity & Real Estate

    PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) PE and RE AUM stood at Total Revenues 313 320 -2% 261 20% 1,069 1,104 -3% Rs 65 bn, +3% YoY in Operating Cost 209 180 16% 160 31% 669 633 6% FY20 EBITDA 104 140 -26% 101 3% 400 471 -15% PBT 104 13

  19. Slide 19: PE & RE – Exits from funds provide visibility

    PE & RE– Exits from 7 funds provides strong visibility over next decade Launch period of PE Funds QGLP investments delivering higher IRR Investment Amt(Rs Mn) IRR (%) 61% 500 480 450 IREF IV Rs 12 bn 400 400 400 400 IBEF III IREF III Rs 23 bn 37% 33% IREF II (Rs 10.3 29% 30% (Rs 4.9 bn) 26% IBEF II

  20. Slide 20: Wealth Management

    WEALTH MANAGEMENT Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) Wealth AUM AUM (bn) 156 175 -11% 189 -17% 156 175 -11% at Rs 156 bn Revenues 255 258 -1% 252 1% 1,007 1,088 -7% Operating Cost 232 211 10% 206 13% 910 878 4% EBITDA 23 47 -50% 46 -50% 98 210 -53% PBT 20 43 -

  21. Slide 21: Wealth Management

    Wealth Management Wealth AUM growth trend Wealth Sales RM 126 129 175 Rs bn 118 156 147 77 78 101 64 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Upfront and trail contribution in revenues (%) Trail income will protect margin in downturn Upfront Trail % of Cost covered by Trail revenue 80% 72%

  22. Slide 22: Broking & Distribution

    BROKING & DISTRIBUTION Market share stable at Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY(%) 2.5%; cash market Revenues 3,381 2,809 20% 3,083 10% 12,249 11,334 8% share is at multi Operating Costs 2,197 1,927 14% 2,059 7% 8,025 7,495 7% quarter high EBITDA 1,185 882 34% 1,

  23. Slide 23: Broking & Distribution

    Broking & Distribution Retail Broking & Distribution  During lockdown, average 57% clients traded online with a peak of 64% Distribution penetration (% of total client base of 1.45 mn) which is highest ever clients traded online Retail Distribution Penetration to Total clients(%)  Our website got

  24. Slide 24: Broking & Distribution – Strong growth in Volume & Distribution AUM

    Broking & Distribution – Strong growth in Volume & Distribution AUM DP AUM growth trend (Rs bn) Rising Distribution AUM Distribution AUM (Rs bn) Distribution Net Sales (Rs bn) CAGR: 16% 607 590 96 CAGR: 50% 90 468 75 450 44 256 35 18 16 17 9 7 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 MOFSL

  25. Slide 25: Investment Banking

    INVESTMENT BANKING DEALS Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) Revenues 9 146 -94% 27 -67% 121 381 -68% Operating Costs 55 72 -23% 53 5% 223 261 -15% EBITDA -47 74 - -26 - -101 120 - QIP - Rs 18.9 bn PBT -48 70 - -30 - -112 109 - PAT -37 55 - -23 - -87 81 - QIP -

  26. Slide 26: Home Finance

    HOME FINANCE Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ% FY20 FY19 YoY% Rating upgrade from Net Interest Income (NII) 579 513 13% 526 10% 2,224 2,308 -4% CRISIL to AA-/Stable Total Income 632 553 14% 540 17% 2,332 2,443 -5% during FY20 Operating Cost 231 237 -3% 237 -3% 956 1,036 -8% - Emp

  27. Slide 27: Home Finance – ECL provisioning and asset quality

    Home Finance ECL Provisioning details MOHFL’s GNPA NNPA and PCR trend GNPA NNPA PCR Particulars (Rs mn) Q4FY20 90% Stage 1 & 2 36,010 10.4% % portfolio in stage 1 & 2 98.19% 9.3% 80% Stage 3 660 7.8% 7.2% 66% 70% % portfolio in Stage 3 1.81% 62% ECL Provision % Stage 1 & 2 0.75% 60% 53% Total Assets

  28. Slide 28: Home Finance

    Home Finance  Fruition of revival efforts visible with positive trends in new loans Loan book and disbursement trend 30,000 sourced from Apr-18 Loan Book (Rs mn) Disbursement (Rs mn) 26,000  Only 3 cases in NPA pool out of ~5000 cases disbursed. 48,320 43,570 22,000  In new book, ~93% of disburse

  29. Slide 29: Home Finance

    Home Finance  Average ticket size is Rs 0.88 mn, with loans extended to more than Net Worth (in mn) and D/E ~47,900 families, as MOHFL is focused on the affordable housing 8,800 Net Worth (Rs mn) Leverage (x) 6.0 5.0 segment with no exposure to builder finance. 8,600 Net leverage 5.0 8,400 4.3 at 3

  30. Slide 30: Home Finance – Strong liability management

    Home Finance – Strong liability management Liability mix based on rates (%) Average tenor of outstanding borrowing (months) Floating Rate Liabilities (%) Fixed Rate Liabilities (%) Average Tenure of Outstanding Borrowings (months) (Residual) 48 48 45 45 38% 45 50% 45% 42 39 62% 36 50% 55% 33 30 FY18

  31. Slide 31: Home Finance

    Home Finance Infrastructure & Resources Login to sanction & sanction to disbursement trend Employees Branch Sanctions to logins Disbursements to sanctions 1350 200 1300 1273 72% 65% 66% 66% 1250 61% 62% 62% 1184 55% 1200 1174 62% 44% 46% 1150 54% 39% 36% 36% 34% 1100 1050 120 1000 113 110 950 900 10

  32. Slide 32: Home Finance

    Home Finance PPOP (in mn) Tier-I and Total CRAR Tier I CRAR CRAR 467 46.4% 47.6% 401 360 37.8% 342 35.5% 316 319 31.4% 302 29.2% 282 28.1% 27.5% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY17 FY18 FY19 FY20 ROA and ROE ROA Tree-FY20 ROA ROE PAT to Assets 0.9% 8.3% Tax to Assets 0.5% 8.

  33. Slide 33: Home Finance

    Home Finance COF and Yield Spread and NIM Yield COF NIM Spread 5.9% 14.4% 14.1% 14.3% 14.5% 5.6% 14.0% 13.9% 13.6% 13.3% 5.2% 5.2% 5.0% 4.6% 4.5% 4.4% 10.3% 10.3% 10.5% 10.5% 4.3% 4.4% 10.0% 9.9% 10.3% 10.1% 3.8% 3.8% 3.6% 3.6% 3.7% 3.1% Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY19

  34. Slide 34: Fund Based Investments

    FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q4FY20 Q4FY19 YoY (%) Q3FY20 QoQ (%) FY20 FY19 YoY (%) investment including MTM gains was Rs 12.2 Revenues -3,754 535 - 535 - -2,585 591 - bn as of FY20. PAT -3,520 491 - 550 - -2,121 545 - Note: Fund based revenues and PAT excludes Othe

  35. Slide 35: 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 & Promoter AUM in AMC (Rs bn) PE AUM (Rs bn) Sponsor Commitment in PE (Rs bn) 16 4.9 297 65 Unrealised gain from quoted equity investments Quoted investment at cost (Rs bn) Unrealised gai

  36. Slide 36: MOFSL Journey

    MOFSL Journey - Launched India’s digitally first NFO amid Covid-19 crisis - MOHFL rating upgraded to AA-/Stable by CRISIL - Reach expands to - Asset - Group AUM Rs - Expansion in AMC & 2018 over 100 business 2003 2010 Management 1 tn. Broking business locations and launches its - Revenues and - Anno

  37. Slide 37: Management team

    Management team Raamdeo Agrawal, Chairman Vijay Kumar Goel, CEO- Housing Finance A CA by qualification, Mr Agarwal started MOFSL along with Mr Motilal Mr Goel is a CA (rank holder) and a Cost Accountant. He has worked Oswal . in 1987. He is Chairman of MOFSL and also the co-founder of with. the Adit

  38. Slide 38: Independent Directors

    Independent Directors Praveen Tripathi, Independent Director (MOFSL) Mr Tripathi has done his PGDM from IIM, Ahmedabad and B. Tech Ashok Jain Independent Director (MOAMC) (Electrical . Engineering) from IIT, Kanpur. He is currently CEO of Mr .Jain is the Whole-time Director and CFO of Gujarat Borosi

  39. 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

  40. 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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