Motilal Oswal Financial Services Limited · NSE:MOTILALOFS

Motilal Oswal Financial Services — Q3 FY2021 Earnings Presentation

46 slides from Motilal Oswal Financial Services's earnings presentation, Jan 28, 2021

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

    January 28, 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 – Financi

  2. Slide 2: Earnings Presentation Q3FY21 & 9MFY21

    Motilal Oswal Financial Services Ltd Earnings Presentation | Q3FY21 & 9MFY21 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 6-9 Financials Page 10-39 Businesses

  4. Slide 4: Key Highlights for the quarter

    Key Highlights for the quarter Highest ever Highest ever Highest ever AMC, quarterly Highest ever Gains on Fund Distribution Revenue and Net worth based and Wealth Profit Investments AUM Highest ever Highest ever Highest ever Highest ever NIM led by New Client Broking ADTO Interim lowest ever Acquis

  5. 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  Market share improved  AMC AUM stood at Rs  NIM expanded by  Highest ever gain on by 20bps YoY to 2.8% 439 bn, +14% QoQ in 120bps

  6. 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 75% in 9MFY21 3% in 9MFY21 Consolidated 106% in 9MFY21 37% in 9MFY21 34% in 9MFY21 (8% of NWE) (25% of NWE) (3% of NWE) (63% of

  7. Slide 7: Consolidated Financials – Revenue Mix

    Consolidated Financials – Revenue Mix Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Broking 4,307 3,083 40% 4,216 2% 11,957 8,867 35% Investment Banking 2 27 - 20 - 25 112 - Asset Management 1,291 1,439 -10% 1,162 11% 3,489 4,246 -18% Private Equity 266 261 2% 268 -1

  8. Slide 8: Consolidated Financials – PAT Mix

    Consolidated Financials – PAT Mix PAT (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Broking 769 483 59% 815 -6% 2,196 1,424 54% Investment Banking -29 -23 - -18 - -86 -50 - Capital Markets 740 460 61% 797 -7% 2,110 1,373 54% Asset Management 382 414 -8% 290 32% 911 1,244 -27% Pr

  9. Slide 9: Consolidated Balance Sheet

    Consolidated Balance Sheet Particulars (Rs bn) 9MFY21 FY20 Sources of Funds Net Worth 39.3 30.9 Borrowings (1) 46.9 46.3 Minority Interest 0.5 0.4 Total Liabilities 86.7 77.5 Application of Funds Fixed assets (net block) 3.4 3.3 Investments 33.8 30.9 Loans and Advances (2) 41.7 40.8 Net current asse

  10. Slide 10: Strong Revenue and Profit trend

    Strong Revenue and Profit trend Revenue Trend Profitability Trend Revenues (Rs bn) PAT (Rs bn) EPS (Rs) 29.0 54 CAGR: 21% 26.8 27.2 23.1 43 19.3 25 10.9 20 18 12 1.7 3.6 6.3 2.9 1.8 8.0 FY16 FY17 FY18 FY19 FY20 9MFY21 FY16 FY17 FY18 FY19 FY20 9MFY21 Revenue Mix PAT Mix 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) CAGR: 30% 439 CAGR: 25% 227 389 356 175 297 156 147 203 101 105 64 FY16 FY17 FY18 FY19 FY20 9MFY21 FY16 FY17 FY18 FY19 FY20 9MFY21 DP AUM growth trend (Rs bn) Distribution AUM growth trend (Rs bn) 940 119 CAGR: 16

  12. Slide 12: Strong growth in Net worth

    Strong growth in Net worth Net Worth Trend Rs bn Benefits of having near 10.0 CAGR: 19% (post buyback) 45 to liquid net worth: Net Worth (Rs bn) P/BV (x) 40 • Helped to “seed” our 8.0 6.8 35 new businesses, which 30 are scalable, high-RoE 6.0 4.9 25 opportunities. 3.2 3.4 20 • Serve as highly liquid

  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  Benefitting from Industry  Expanded Sales  Expanding products  Incremental focus on consolidation force with 30+ across asset classes. ramp-up sales.  15+ prime

  14. Slide 14: BROKING & DISTRIBUTION

    BROKING & DISTRIBUTION Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Market share improved by 20 bps Revenues 4,307 3,083 40% 4,216 2% 11,957 8,867 35% YoY to 2.8%;traction in - Brokerage 2,942 1,929 52% 3,028 -3% 8,378 5,405 55% cash market share - Distribution 266

  15. Slide 15: Broking & Distribution – Strong business performance

    Broking & Distribution – Strong business performance Retail Broking & Distribution Institutional Broking  Mobile app logins have been peaking since last 3 months at 3.6 lakhs  Institution broking team wins big in Asiamoney poll 2020.  Online business witnessed 60%+ turnover during 9MFY21  Ranked

  16. 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 0.50 497 CAGR: 23% CAGR: 41% 0.38 0.31 0.32 235 251 0.21 470 0.17 174 137 85 216 232 59 159 121 51 74 8 11 15 15 19 19 27 FY16 FY17 FY18 FY19 FY20 9MFY21 FY16 FY17

  17. 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) 940 119 CAGR: 16% CAGR: 50% 96 90 607 590 75 450 468 44 256 18 FY16 FY17 FY18 FY19 FY20 9MFY21 FY16 FY17 FY18 FY19 FY20 9MFY21 Distribution AUM Mix SIP AUM and Live SIP count AUM (R

  18. Slide 18: Broking & Distribution- Digital Ecosystem across Client Life Stage

    Broking & Distribution- Digital Ecosystem across Client Life Stage 17

  19. Slide 19: Broking & Distribution- Digital to the core of the company

    Broking & Distribution- Digital to the core of the company 18

  20. Slide 20: INVESTMENT BANKING

    INVESTMENT BANKING DEALS Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Revenues 2 27 - 20 - 25 112 - QIP - Rs 177 bn Operating Costs 37 53 -31% 36 1% 127 167 -78% EBITDA -35 -26 - -16 -101 -55 - PBT -38 -30 - -20 -110 -64 - QIP - Rs 150 bn PAT -29 -23 - -18 - -86 -50

  21. Slide 21: ASSET MANAGEMENT

    ASSET MANAGEMENT Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) AMC Closing AUM Avg. AUM (bn) 409 395 4% 375 9% 371 387 -4% Rs 439 bn,+14% QoQ Total Revenues 1,291 1,439 -10% 1,162 11% 3,489 4,246 -18% in Q3FY21 -Mutual Fund (Net) 315 337 -7% 258 22% 812 1,011 -20% -A

  22. Slide 22: Asset Management

    Asset Management  Market share in MF Equity AUM continued to remain stable at 1.8% in Q3FY21. Overall industry witnessed a fall in equity flows.  Strengthen sales vertical with 30+ sales employees added in CY20 including some senior level hiring.  Branch network has also expanded by adding 10 bra

  23. Slide 23: 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 Banks+NDs IFA WM 439 CAGR: 30% 389 14% 18% 16% 14% 10% 356 26 28 23% 24 297 148 29% 27% 27% 26% 160 19 203 150 25% 116 22% 19% 21% 21% 5 105 105 262 183 200 35%

  24. Slide 24: Asset Management – Potential levers to scale profitability

    Asset Management – Potential levers to scale profitability AMC EBITDA and Opex to AUM trend MOAMC profitability trend PAT (Rs mn) PAT to AAUM (bps) Op. Cost to Avg AUM (bps) EBITDA Margin (%) 42 60 50% 39 39 51 40% 38% 32 33 50 43 37% 32 33% 40% 40 27 30 29 30% 22% 30 20% 33 20% 20 10 10% 264 498 1,

  25. Slide 25: Asset Management – Granularity of MF AUM

    Asset Management – Granularity of MF AUM 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% 31% 26.1% 26.1% 27% 1.55% 24.7% 25% 25% 22.6% 2

  26. Slide 26: PRIVATE EQUITY & REAL ESTATE

    PRIVATE EQUITY & REAL ESTATE Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Committed investment Total Revenues 266 261 2% 268 -1% 754 756 - AUM till date stands at Rs 65 bn Operating Cost 156 160 -2% 158 -1% 459 460 - EBITDA 110 101 9% 110 - 295 296 - PBT 108 99 9% 1

  27. Slide 27: 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 10 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

  28. Slide 28: 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 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

  29. Slide 29: WEALTH MANAGEMENT

    WEALTH MANAGEMENT Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Wealth AUM AUM (bn) 227 189 20% 200 13% 227 189 20% at an all-time high at Rs Revenues 330 252 31% 349 -6% 900 752 20% 227 bn, up 13% QoQ Operating Cost 224 206 9% 236 -5% 677 678 - EBITDA 106 46 129% 11

  30. Slide 30: Wealth Management

    Wealth Management Wealth AUM (Rs bn) AUM Breakup (Rs bn) MF PMS AIF PE/RE Debt 227 CAGR: 25% 227 180 181 189 175 156 33% 147 156 28% 31% 31% 28% 9% 11% 8% 101 12% 12% 8% 9% 8% 13% 18% 64 20% 8% 20% 19% 17% 33% 32% 28% 29% 34% FY16 FY17 FY18 FY19 FY20 9MFY21 Q1FY20 Q2FY20 Q3FY20 Q4FY20 9MFY21 Wealth

  31. Slide 31: HOME FINANCE

    HOME FINANCE Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) Improvement in CoF led Net Interest Income (NII) 629 526 20% 558 13% 1,755 1,646 7% to margin expansion Total Income 655 540 21% 563 16% 1,795 1,700 6% Operating Cost 215 237 -9% 202 7% 628 725 -13% - Employe

  32. Slide 32: Home Finance

    Home Finance ECL Provisioning Details MOHFL’s GNPA and NNPA Trend Particulars (Rs mn) Q3FY21 Stage 1 & 2 34,501 GNPA NNPA % portfolio in stage 1 & 2 97.07% 3.0% 2.9% Stage 3 1,040 2.3% 2.3% % portfolio in Stage 3 2.93% 1.8% 1.8% ECL Provision % Stage 1 & 2 1.23% 1.6% 1.4% 1.3% 1.2% Total Assets 35,4

  33. Slide 33: 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% 14.3% 14.3% 45% 38% 42% 10.1% 10.3% 10.2% 10.2% 50% 9.4% 5.4% 5.2%

  34. Slide 34: Home Finance

    Home Finance LTV of 59% and FOIR of 44% Customer segment mix and Product mix LTV FOIR 10% 60% 59% 59% 28% 19% 57% 50% 45% 7% 26% 8% 2% 44% 43% 44% 4% 43% New Purchase Self-Construction Salaried- Doc Salaried- Cash Resale Composite FY18 FY19 FY20 9MFY21 SE- Assessed SE- Doc Home Improv./Ext. Others S

  35. Slide 35: 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 capital6.0 60% 290 9,500 49% 5.0 infusion at Rs 8.5 bn 270 43% 44% 44% 50% 9,000 5.0 40% 4.3 250 37% 36% 36% 3.4 8,500 4.0 40% 33% 3.2 230 2.9 30%

  36. Slide 36: FUND BASED INVESTMENTS

    FUND BASED INVESTMENTS Total quoted equity Particulars (Rs mn) Q3FY21 Q3FY20 YoY (%) Q2FY21 QoQ (%) 9MFY21 9MFY20 YoY (%) investment including MTM gains was Rs 18.9 Revenues 2,523 535 - 2,035 24% 6,043 1,169 - bn as of Q3FY21. PAT 2,112 550 - 1,728 22% 5,143 1,399 - Fund Based OCI 897 492 82% 480 87

  37. Slide 37: 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) 31 7 439 65 Strong Growth in investments over the years Investment at cost Gain Rs bn CAGR: 28% 26.0 1

  38. Slide 38: Environment Social Governance Initiatives

    Environment Social Governance Initiatives 37

  39. Slide 39: 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

  40. Slide 40: 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 of • Employees volunteered for cares fund. Giving Week, employees and virtual teaching to school  Supported several local NGOs well-wishers parti

  41. Slide 41: 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

  42. Slide 42: 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 

  43. Slide 43: Awards & Accolades

    Awards & Accolades Asia Money Brokers Poll 2020 Motilal Oswal PWM Motilal Oswal wins MOPWM wins Excellent No. 1 Local Brokerage win “Best Boutique award for innovation in designing learning No. 1 Overall Sales, Wealth Manager – in cross media content award at the No. 1 Sales Trading India award by A

  44. Slide 44: MOFSL Journey

    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 - Group AUM Rs - Expansion in AMC & 2018 over 100 business 2003 2010 Management 1 tn. Broking business locations and launches its - Rev

  45. Slide 45: 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

  46. Slide 46: 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

Motilal Oswal Financial Services — Q3 FY2021 Earnings Presentation on 6ix