Motilal Oswal Financial Services Limited · NSE:MOTILALOFS
Motilal Oswal Financial Services — Q2 FY24 Earnings Presentation
35 slides from Motilal Oswal Financial Services's earnings presentation, Nov 1, 2023
Slide 1: Exchange filing cover letter
November 01, 2023 To 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 – Fi
Slide 2: Earnings Presentation Q2FY24 & H1FY24
Financial Services Earnings Presentation Q2FY24 & H1FY24 BUSINESSES FOCUS ON SUSTAINABLE ALL BIZ OFFER HUGE BUILDING SCALE GROWTH HEADROOM FOR GROWTH
Slide 3: Group Structure
Group Structure MOFSL Group Capital Markets Asset and Wealth Management Housing Finance Asset Private Broking & Institutional Investment Wealth Management Equity & Distribution Equities Banking Management Company Real Estate Motilal Oswal Motilal Oswal Motilal Oswal Asset Motilal Oswal Motilal Oswal
Slide 4: Well positioned for the USD 100+ tn savings opportunity
3 FY98 0.1 0.1 FY00 0.1 KEY HIGHLIGHTS 0.1 FY02 0.1 0.1 FY04 0.2 FINANCIALS 0.2 FY06 0.3 0.3 FY08 0.5 BUSINESSES 0.4 FY10 0.5 Source: Motilal Oswal Wealth Creation Study 0.6 FY12 0.6 Gross Domestic Savings (USD tn) 0.6 FY14 0.6 0.7 FY16 0.7 0.7 FY18 0.9 0.9 FY20 0.8 0.8 FY22 0.9 1.0 FY24 1.2 1.3 FY2
Slide 5: Decadal strong growth, Next decade equally exciting
Decadal strong growth, Next decade equally exciting Demat Account grown at 20% CAGR in last 10 years (in Mn.) Retail ADTO grown at 68% CAGR in last 10 years (₹ tn ) Monthly addition 120.20 4.0 140 3.5 Total (RHS) 120 3.0 61.12 100 2.5 80 2.0 29.66 60 1.5 11.75 40 6.93 4.86 1.0 3.12 1.83 1.14 1.06 0.
Slide 6: Key Highlights for Q2FY24
Key Highlights for Q2FY24 Assets under advice Revenue Operating profit Total PAT (incl. OCI) Net Worth ₹ 4.1 tn 30% YoY ₹ 14.2 bn 30% YoY ₹ 2.9 bn 26% YoY ₹ 5.5 bn ₹ 74.6 bn 25% YoY Lending Book 1 ROA (incl. OCI) 2 ROE 2 Clients Employees ₹ 105.1 bn 55% YoY 9.4% 34.9% ~6.0 mn 16% YoY 10,518 Trailing
Slide 7: Business Updates
Business Updates Capital Markets • Demat accounts increased ~3x from 47 mn in Sep 20 to 130 mn Sep 23. Retail industry broking volumes (ADTO) grown 12x in last 3 years • MOFSL amongst top 3 brokers in terms of Gross Brokerage. Focus to further improve our market share in a fast growing market • Thir
Slide 8: Improvement in market share across businesses
Improvement in market share across businesses Q2FY23 Q2FY24 Retail Cash Market Share 5.8% 7.1%* Retail Derivative Market Share 3.9% 4.6% Capital market Currency Market Share 11.1% 22.3% SIP Market Share 0.9% 1.4% MF Gross Sales Market Share 0.6% 1.2% MF Net Sales Market Share (0.6)% 1.1% Asset Manag
Slide 9: 23% CAGR growth in Net Worth for last 8 years
23% CAGR growth in Net Worth for last 8 years Operating PAT and Fund Based Investments PAT driving robust Net Worth growth at 23% CAGR post 26% Dividend Payouts Operating PAT Fund Based PAT Dividend Payout 74.6 ₹ Bn 62.5 H1FY24 56.7 24.2 RoE 17.2 44.6 35% 17.2 30.5 30.9 12.8 28.9 5.0 2.3 62.5 Book V
Slide 10: Consolidated P&L
Consolidated P&L PARTICULARS (₹ Mn) Q2FY24 Q2FY23 YoY (%) Q1FY24 QoQ (%) H1FY24 H1FY23 YoY (%) Capital Markets (Broking, Distribution & IB) 10,191 7,219 41% 8,847 15% 19,038 13,327 43% Asset and Wealth Management 2,532 2,338 8% 2,430 4% 4,962 4,530 10% Housing Finance 1,435 1,315 9% 1,436 0% 2,871 2
Slide 11: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (₹ Bn) Sept 30, 2023 Mar 31, 2023 Net Worth Deployment SOURCES OF FUNDS Net Worth 74.6 62.5 10% Borrowings 119.9 103.1 6% Minority Interest 0.3 0.3 17% Total Liabilities 194.9 165.9 74% APPLICATION OF FUNDS Fixed assets (net block) 5.3 4.7 Fund Based Investment
Slide 12: Capital Markets
Capital Markets 7.5% 7.2% ₹ 27,000+ ₹ 250 Bn ₹ 6.2 Bn • MOFSL amongst top 3 brokers in terms of Gross Brokerage. Focus to further improve our market Retail F&O premium Retail cash market One of the highest Distribution AUM; Distribution Net share in a fast growing market market share; +30bps QoQ sha
Slide 13: Capital markets Clients characteristics - HNI and affluent class
Capital markets Clients characteristics - HNI and affluent class 2,500+ Advisors to cater varied ARPU – Rs. 27,000+ Client Assets clients financial ~3.1 Tn. needs More than 70% of DP ARR contributes Average age of clients balance are in >1 Cr 37% of net 41 years bucket operating income Huge potentia
Slide 14: Transition to Financial Services Advisory business model
Transition to Financial Services Advisory business model Earlier – Broking approach Now – Solution approach for clients financial needs BROKING BROKING LENDING/ CREDIT MUTUAL FUNDS, SOLUTIONS DEBT, FIXED DEPOSITS ADVISOR ADVISOR FINANCIAL PLANNING (RETIREMENT/ ESTATE, SOPHISTICATED WEALTH WILL ETC.)
Slide 15: Broking and Distribution – Gaining Market Share
Broking and Distribution – Gaining Market Share ADTO continue to rise Gaining F&O and Cash market share* YoY (Q2FY24 5,252 Retail Cash – Q2FY23) 7.1% 34 137% 6.1% 6.2% Market Share % 5.7% 5.7% 5.6% 2,469 F&O (₹ Bn) 4.3% 4.6% 2,212 3.9% Retail F&O 3.4% 440 877 23 25 2.8% 2.7% Market Share % 5,219 Cas
Slide 16: Broking and Distribution – Emphasis on Revenue & Productivity
Broking and Distribution – Emphasis on Revenue & Productivity Client Base Franchisee Productivity 37.9 10. 0 35.0 40. 0 9.0 Active Clients 10, 000 1.3 1.4 1.3 1.6 Franchisees 28.5 35. 0 9,0 00 8.0 30. 0 (Lakhs) 1.1 1.4 1.0 8,0 00 7.0 1.2 6.0 19.7 25. 0 7,0 00 1.0 Revenue per Total Clients Franchisee
Slide 17: Broking and Distribution – Large client assets under advice
Broking and Distribution – Large client assets under advice One of the Highest ARPUs in the industry Rising Distribution (Mass Affluent) AUM (₹ Bn) Brokerage ARPU (₹) 250 21,539 213 19,323 18,754 17,763 17,608 Overall 182 ARPU (₹) 134 26,886 28,093 26,518 24,708 27,229 90 FY20 FY21 FY22 FY23 Q2FY24
Slide 18: Capital Markets: Institutional Equities and Investment Banking
Capital Markets INSTITUTIONAL INVESTMENT EQUITIES BANKING • Focus driven differentiated research products with 250+ companies covering 21 sectors, catering to 830+ institutional clients. IPO QIP Block Deal ₹ 6.1 Bn ₹ 10.0 Bn ₹ 8.4 Bn • Strong focus on Offshore as FII activity picks up. • Good pipeli
Slide 19: Asset and Wealth Management
Asset and Wealth Management • AMC AUM stood at ₹ 551 bn, up 18% YoY/7% QoQ with ₹ 551 Bn 35% ₹ 98 Bn ₹ 734 Bn ₹ 23 Bn MF AUM at ₹ 358 bn and Alternates AUM at ₹ 191 bn. AMC AUM; +18% Alternates share in PE & RE Fee Earning Wealth AUM; +91% Wealth Net Sales in YoY AMC AUM YoY Q2FY24; +66% YoY • Durin
Slide 20: Reorientation of MOAMC Investment thesis
Reorientation of MOAMC Investment thesis QGLP PHILOSOPHY Disciplined investing following QGLP investment process. AMC house theme representation across portfolio with sufficient flexibility to FMs to invest outside house theme Focus on “High Levers for STRONG IDEATION Quality, High Growth” sustainab
Slide 21: Asset Management
Asset Management Robust growth in AMC Gross Sales (₹ Bn) AMC MF Folios (in mn) 11.0 11.5 2.2 10.0 1.9 1.9 7.9 6.9 1.3 5.9 1.0 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 AMC MF SIP flows High Share of International MF High Share of Individuals Monthly avg. in Q2FY24
Slide 22: Private Equity & Real Estate Funds
Private Equity & Real Estate Funds Successful launch of PE & RE Funds over years PE & RE Fund Level IRR Expected exit in near future PE RE IBEF IV Valued IRR (%) FY25 FY24 FY26 IREF V ₹ 45 Bn 26.8% Fully IREF IV ₹ 12 Bn 22.4% IBEF III ₹ 11.5 Bn 18.9% 20.4% Exited IRR (%) Exited in 18.2% 18.2% IREF I
Slide 23: Wealth Management
Wealth Management Continued traction in RM addition RM Productivity 7,0 00 221 250 Family 3.5 13.5 16. 0 6,0 00 182 3.0 12.2 14. 0 AUM per 200 RM 10.3 11.0 12. 0 RM (₹ Bn) 5,0 00 144 2.5 4,0 00 129 123 150 2.0 7.8 10. 0 8.0 3,0 00 100 1.5 6.0 Revenue per 2,0 00 1.0 RM (₹ Mn) 4.0 50 4,186 5,004 4,665
Slide 24: Focus on building recurring revenue
Focus on building recurring revenue… Closing AUM/Loan Book (₹ Bn) Net Yield/NIM Net Revenue (₹ Mn) Particulars Q2FY24 Q1FY24 Q2FY23 Q2FY24 Q1FY24 Q2FY23 Q2FY24 Q1FY24 Q2FY23 Asset Management 551 515 467 0.74% 0.77% 0.82% 1005 904 957 Wealth Management* 468 441 384 0.48% 0.56% 0.50% 553 593 440 Priva
Slide 25: Strong ARR across Capital market & Asset and Wealth Management
Strong ARR across Capital market & Asset and Wealth Management Particulars (₹ Mn) Q2FY24 Q2FY23 YoY% Q1FY24 QoQ % Annual Recurring Revenue (ARR) 3,413 2,743 24% 2,951 16% Asset Management Fees 1,325 1,237 7% 1,215 9% Wealth & Distribution 456 390 17% 375 22% Net Interest Income 1,339 861 56% 1,129 1
Slide 26: Home Finance
Home Finance • Retail disbursement grew by 53% QoQ to ₹ 1.43 bn ₹ 37.6 Bn ~2.0 Bn 7.7% 8.0% 3.1% Disbursements in NIM in Q2FY24 Incremental COF in ROA in H1FY24 AUM as on Sep-23 Q2FY24 Q2FY24 • Yield on advances increased to 14.2%, up 30 bps YoY and spread maintained at 6.0%. PARTICULARS (₹ Mn) Q2FY
Slide 27: Home Finance - Experienced Leaders
Home Finance - Experienced Leaders Sukesh Bhowal has a rich experience of 27 years in Business Management, Sales & Distribution, Retail Lending, Mortgage Lending, Real Estate Lending and Retail Banking. He was associated with Chief DCB Bank, where he headed the Mortgages, Micro-Mortgages, Constructi
Slide 28: Home Finance: Product Mix and Geographic Reach
Home Finance Product Mix Geographic Reach 32% New Purchase PRESENCE ACROSS HR 24% Self-Construction DL 111 LOCATIONS IN 12 STATES/UTS UP 14% Construction Finance* RJ 12% Resale GJ MP CG 07% LAP 133 Branch Sales MH 03% Home Impr./Ext. Manager servicing the TS above locations KA AP 02% Composite 07% O
Slide 29: Home Finance: Liability Mix and Key Ratios
Home Finance Diversified Liability Mix Key Ratios Term loan 7% 3% 8% 12% NCD Parameters H1FY24 H1FY23 8% 7% 5% 7% 5% 16% NHB 52% 28% 19% 40% 21% 8% Securitization Yield 14.4% 13.9% ECB 49% 55% 50% 57% CP 45% COF 8.3% 7.9% FY20 FY21 FY22 FY23 H1FY24 Spread 6.1% 6.1% Net Worth and Net D/E NIM 7.7% 7.8
Slide 30: Home Finance – Focus on strengthening sales and improve productivity
Home Finance – Focus on strengthening sales and improve productivity Strengthening Sales RM force Improving sales productivity • Sales and lead management is now through digital mode with geo- tagging and geo-fencing capabilities 629 • 80% of disbursements are based on paperless eSign 545 • 80% of l
Slide 31: Fund Based Investments
Fund Based Investments • Fund based book includes sponsor commitments ₹ 54.7 Bn ₹ 51.1 Bn 17.5% 19.5% Total equity cum investments in equity MF, PE funds, Real estate Cumulative XIRR on XIRR on PE/RE Total investments investment including alternate funds total investments investments funds, AIF and
Slide 32: Fund Based Investments – Skin in The Game
Fund Based Investments – Skin in The Game Skin in the Game in AMC (₹ Bn) Strong Growth in investments over the years 551 AMC AUM 51.1 23 Sponsor AUM 42.8 40.5 19.6 19 Promoter AUM 13.3 31.0 17.4 Skin in the game in PE & RE (₹ Bn) 13.1 17.5 1.7 31.5 136 Total Capital 29.5 Raise till date 23.1 15.8 17
Slide 33: MOFSL - ESG Initiatives
MOFSL - ESG Initiatives Launched online ESG profile platform, CRISIL has assigned “STRONG” rating to which adheres to international frameworks such as MOFSL in its Sustainability Yearbook 2022 IFC, GRI, SASB, CDP etc. ENVIRONMENTAL SOCIAL GOVERNANCE • More than 80% of servers are in • Physical & emo
Slide 34: 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 35: For any query, please contact
For any query, please contact : S H A L IB H A D RA S H A H CHIEF FINANCIAL OFFICER 91-22-7193 4917 / 98190 60032 shalibhadrashah@motilaloswal.com C H E TA N PA RM A R HEAD INVESTOR RELATIONS 91-22-7190 6600 / 74003 12700 chetan.parmar@motilaloswal.com
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