Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q1 FY2021 Earnings Presentation
41 slides from Motilal Oswal Financial Services's earnings presentation, Jul 31, 2020
Slide 1: Exchange filing cover letter
July 31, 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 – Financial
Slide 2: Earnings Presentation Q1FY21
Motilal Oswal Financial Services Ltd Earnings Presentation | Q1FY21 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 11-35 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 CoF reduction by 50bps Total quoted equity by 40bps QoQ to 3.0% 352 bn, +18% QoQ in YoY led to margin investment inclu
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 103% in Q1FY21 5% in Q1FY21 Consolidated 70% in Q1FY21 33% in Q1FY21 33% in Q1FY21 (8% of NWE) (30% of NWE) (7% of NWE) (55% of
Slide 6: Consolidated Financials – Revenue Mix
Consolidated Financials – Revenue Mix Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) Broking 3,434 2,778 24% 3,381 2% Investment Banking 4 3 26% 9 -59% Asset Management 1,036 1,443 -28% 1,316 -21% Private Equity 219 240 -9% 283 -23% Wealth Management 221 221 0% 255 -13% Housing Finance 1,3
Slide 7: Consolidated Financials – PAT Mix
Consolidated Financials – PAT Mix PAT (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) Broking 613 401 53% 451 36% Investment Banking -39 -39 - -37 - Capital Markets 573 362 58% 414 38% Asset Management 240 362 -34% 357 -33% Private Equity 52 51 3% 48 10% Wealth Management 0 6 -97% 14 -99% Asset & Wealt
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs bn) Q1FY21 FY20 Sources of Funds Net Worth 32.8 30.9 Borrowings (1) 45.9 46.3 Minority Interest 0.4 0.4 Total Liabilities 79.0 77.5 Application of Funds Fixed assets (net block) 3.3 3.3 Investments 33.2 30.9 Loans and Advances (2) 41.9 40.8 Net current asse
Slide 9: Financial Performance
Financial Performance Revenue Trend Profitability Trend Revenues (Rs bn) PAT (Rs bn) EPS (Rs) CAGR: 21% 43 29.0 26.8 23.1 19.3 25 20 18 10.9 7.7 12 11 1.7 3.6 6.3 2.9 1.8 1.7 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Revenue Mix Operating Profit Mix Capital Market Asset & Wealt
Slide 10: Businesses Building Scale
Businesses Building Scale AMC AUM growth trend (Rs bn) Wealth AUM growth trend (Rs bn) CAGR: 30% CAGR: 25% 175 178 389 356 156 352 147 297 101 203 64 105 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) CAGR: 16% 607 61
Slide 11: Financial Performance – Growth Drivers
Financial Performance GROWTH DRIVERS BROKING & DISTRIBUTION ASSET MANAGEMENT WEALTH MANAGEMENT HOUSING FINANCE ADTO grew 51% YoY with Positive net flows for Business continues to be GNPA /NNPA at rise in cash market share consecutive four under Investment mode. 1.8%/1.3% respectively quarter
Slide 12: Broking & Distribution
BROKING & DISTRIBUTION Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) Market share Revenues 3,434 2,778 24% 3,381 2% improved by 40bps - Brokerage 2,397 1,663 44% 2,202 9% QoQ to 3.0%; multi- - Distribution 166 216 -23% 263 -37% quarter high Operating Costs 2,220 1,811 23% 2,197 1% EBITDA
Slide 13: Broking & Distribution
Broking & Distribution Retail Broking & Distribution Distribution business Penetration During lockdown, a new peak of 64% clients traded online and this Retail clients (mn) Retail Distribution Penetration to Total clients(%) averaged at 57%. Single day number of trades executed crossed 1 million
Slide 14: Broking & Distribution – 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) 285 CAGR: 41% CAGR: 23% 235 189 3.7% 3.7% 174 3.5% 3.6% 3.2% 3.4% 137 253 216 85 159 17
Slide 15: 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: 16% 607 612 CAGR: 50% 102 590 96 90 450 468 75 256 44 18 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Distribution AUM Mix SIP AUM and Live SIPs AUM (Rs bn)
Slide 16: Investment Banking
INVESTMENT BANKING Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) DEALS Revenues 4 3 26% 9 -59% Operating Costs 54 56 -3% 55 -2% EBITDA -51 -53 - -47 - QIP - Rs 18.9 bn PBT -52 -56 - -48 - PAT -39 -39 - -37 - QIP - Rs 28 bn Disruptions due to the Covid pandemic and consequent lockdown ha
Slide 17: Asset Management
ASSET MANAGEMENT Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) AMC Closing AUM Avg. AUM (bn) 326 389 -16% 385 -15% Rs 352 bn,+18% QoQ in Q1FY21 Total Revenues 1,036 1,443 -28% 1,316 -21% -Mutual Fund (Net) 240 342 -30% 264 -9% -Alternates (Net) 357 480 -26% 504 -29% Other Costs 266 266 0%
Slide 18: Asset Management
Asset Management SIP inflows in Q1FY21 was at Rs 3.85 bn (on realised basis). Average SIP ticket size at Rs 3,660 per month is higher than the industry average of Rs 2,550. Our SIP market share and proportion to total inflows are steady. Market share in MF Equity AUM continued to remain stable a
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 CAGR: 30% 389 7% 7% 7% 356 352 12% 11% 8% 28 14% 11% 10% 24 15% 17% 297 22 17% 18% 18% 19% 160 19 23% 19% 203 150 132 20% 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) 60 40% 45% 51 38% 42 40% 39 39 50 43 33% 32% 35% 32 32 40 30% 30 33 33 22% 30 25% 20% 27 30 20% 20 15% 10% 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 1.43% 1.43% 31.4% 29.4% 29.5% 1.42% 27.0% 28.0% 26.1% 24.9%
Slide 22: Private Equity & Real Estate
PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) Committed investment Total Revenues 219 240 -9% 283 -23% AUM till date stands at Operating Cost 144 142 2% 179 -19% Rs 65 bn EBITDA 75 99 -24% 104 -28% PBT 74 94 -21% 104 -29% PAT 52 51 3% 48 10% Note: In Q1FY21, r
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 17.5 bn 17% Niche manufacturing Current Value of Investments* Rs 24.2 bn
Slide 24: 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 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) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) Wealth AUM AUM (bn) 178 180 -1% 156 14% at Rs 178 bn, up 14% Revenues 221 221 0% 255 -13% QoQ Operating Cost 217 211 3% 232 -7% EBITDA 4 10 -57% 23 -81% PBT 1 7 -80% 20 -93% PAT 0 6 -97% 14 -99% Strong traction in Note: Q1FY2
Slide 26: Wealth Management
Wealth Management Wealth AUM (Rs bn) Wealth UHNI Family Clients CAGR: 25% 175 178 4,375 4,186 156 3,719 147 3,136 101 2,194 64 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY17 FY18 FY19 FY20 Q1FY21 Wealth Sales RM RM Vintage Analysis 126 129 131 118 19% 0 to 1 year 25% 77 78 36% of 1 to 3 years RMs have 17% > 3
Slide 27: Wealth Management
Wealth Management AUM Breakup (Rs bn) Recurring and Transactional AUM mix MF PMS AIF PE/RE Liquid MF Other MF PMS, AIF & Structure PE/RE DP Fixed Income 181 189 52% 180 178 48% 156 4% 24% 3% 26% 27% 26% 3% 24% 5% 5% 11% 3% 19% 22% 12% 12% 4% 12% 8% 13% 9% 8% 7% 20% 8% 20% 19% 17% 9% 17% 26% 9% 28% 2
Slide 28: Home Finance
HOME FINANCE Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ% Improvement in CoF led Net Interest Income (NII) 568 578 -2% 579 -2% to margin expansion; Received 1st refinance Total Income 578 599 -4% 632 -9% from NHB Operating Cost 210 239 -12% 231 -9% - Employee Cost 145 160 -9% 153 -5% - Othe
Slide 29: Home Finance
Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) Q1FY21 GNPA NNPA PCR Stage 1 & 2 36,365 87% 100% 10.4% % portfolio in stage 1 & 2 98.26% 80% Stage 3 644 7.8% 66% 62% % portfolio in Stage 3 1.75% 53% 60% ECL Provision % Stage 1 & 2 1.09% 42% Total Assets 36,863 4
Slide 30: Home Finance - Asset quality trend
Home Finance - Asset quality trend No. of moratorium cases Net Slippages (Rs mn) No. of cases As % of total customers 1200 36% 9% of customers opted for 40% 20,000 1000 18,000 32% full 4 months moratorium 35% 16,000 870 14,000 26% 30% 740 12,000 25% 10,000 20% 420 17,372 8,0 00 15,374 15% 250 6,0 00
Slide 31: Home Finance
Home Finance Disbursements in Q1FY21 were Rs 238 mn. While we were planning Loan book and Disbursements trend to ramp up disbursements from Q1FY21, this has been pushed back Loan Book (Rs mn) Disbursement (Rs mn) 30,000 by at least 2 quarters due to the pandemic. ATS of Rs 0.88 mn 48,320 26,000 Fa
Slide 32: 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% 13.9% 14.3% 38% 34% 10.3% 10.3% 50% 45% 10.1% 10.2% 9.8% 5.4% 5.2%
Slide 33: Home Finance
Home Finance Infrastructure & Resources Login to Sanction & Sanction to Disbursement trend Employees Branch 1350 200 Sanctions to logins Disbursements to sanctions 1300 1273 72% 1250 61% 65% 66% 62% 66% 62% 61% 1200 1174 1184 55% 1145 62% 44% 46% 1150 36% 39% 36% 54% 1100 34% 31% 1050 120 Lower conv
Slide 34: Home Finance
Home Finance Opex and Cost to Income Tier-I and Total CRAR Tier I CRAR CRAR Opex (Rs mn) C/I 60% 46.4% 47.6% 290 49% 42.7% 43.9% 270 44% 43% 44% 44% 50% 37.8% 40% 35.5% 36% 37% 36% 31.4% 250 40% 28.1% 27.5% 29.2% 230 30% 210 267 274 258 249 20% 190 237 239 237 231 210 10% 170 150 0% Q1FY19 Q2FY19 Q3
Slide 35: Fund Based Investments
FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q1FY21 Q1FY20 YoY (%) Q4FY20 QoQ (%) investment including MTM gains was Rs 12.7 bn as of Q1FY21. Revenues 1,485 339 338% -3,754 - PAT 1,303 324 302% -3,522 - Note: Fund based revenues and PAT excludes Other Comprehensive Income Total unr
Slide 36: 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) 24 7 352 65 Growth in investments over the years Rs bn 18.6 17.4 17.9 17.5 11.3 8.1 FY16 FY17 FY18 FY1
Slide 37: New Ad Campaign- “Skin in the Game”
New Ad Campaign- “Skin in the Game” Our “SKIN IN THE GAME” campaign being talked in various media 36
Slide 38: 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 39: 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 40: 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 41: 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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