Motilal Oswal Financial Services Ltd Concall Notes - Feb 2025
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Key Financial and Operational Highlights:
Operating revenue for Q3FY25 reached ₹1,345 Cr, up 43% YoY.
Operating profit after tax was ₹525 Cr, reflecting a 38% YoY increase.
Assets under advice (AUA) surpassed ₹6 lakh Cr, marking a 62% YoY growth.
Annual recurring revenue constituted 56% of total group revenues for Q3FY25.
Fee-based revenue contribution rose from 30% in Q3FY24 to 41% in Q3FY25.
Net worth as of December 2024 stood at ₹11,569 Cr, up 40% YoY.
Annualized return on equity (ROE) was reported at 36%.
An interim dividend of ₹5 per share was declared, aligning with profit growth.
Wealth Management Business:
Total assets under advice in Wealth Management grew to ₹3,08,000 Cr, a 67% YoY increase.
Client acquisition reached approximately 1.6 lakh in Q3FY25, up 13% YoY.
Revenues from the Wealth Management segment were ₹570 Cr, up 30% YoY, with profit after tax at ₹190 Cr, a 16% YoY increase.
Retail cash business broking volumes ADTO grew 19% YoY to ₹3,230 Cr.
Cash market volume share improved to 7.4% from 5.6% in FY21, indicating a gain of nearly 200 bps.
F&O premium market share was reported at 7.8%, with total ADTO market share at 7.6% for Q3FY25.
Noted a QoQ reduction in volumes due to new F&O regulations and market corrections, with expectations of recovery in subsequent quarters.
Demat accounts increased by ~10 mn during Q3FY25, reflecting a 33% YoY growth.
Anticipates continued growth driven by low financial savings penetration and rising mutual fund folios.
Plans to expand distribution capabilities with a dedicated team of 600, aiming to increase to 1,000.
Asset & Private Wealth Management Business:
Revenues from Asset and Private Wealth Management stood at ₹551 Cr, a 57% YoY increase, with profits at ₹234 Cr, a 63% YoY growth.
Strong performance in Asset Management with gross flows of ~₹23,300 Cr, up 362% YoY.
Net flows in Asset Management surged from ~₹2,400 Cr in Q3FY24 to ~₹18,500 Cr in Q3FY25.
Asset Management AUM reached over ~₹1.3 lakh Cr, doubling YoY, with mutual fund AUM at ~₹98,000 Cr, up 128% YoY.
SIP flows for Q3FY25 were ₹2,922 Cr, contributing to an SIP AUM of nearly ~₹21,000 Cr.
Private Wealth Management AUM grew to ~₹150,000 Cr, up 34% YoY, with revenues of ₹278 Cr for Q3FY25, reflecting a 61% YoY increase.
Capital Market Business:
Revenues for Q3FY25 in Capital Markets reached ₹151 Cr, a 70% YoY increase, with profit after tax at ₹61 Cr, up 50% YoY.
Institutional Equities business expanded with a 70+ equity research team covering ~300 companies.
Investment Banking business completed 35 deals aggregating to ~₹46,000 Cr in 9MFY25; ranked number 1 in all India QIP league table.
Housing Finance Business:
AUM grew 15% YoY to ₹4,343 Cr, with disbursements increasing 93% YoY to ~₹1,000 Cr in 9MFY25.
NII for the housing finance business stood at ₹88 Cr, up 10% YoY, with strong asset quality reported.
Treasury Business:
Total equity investments, including alternate funds, grew to ₹8,464 Cr, up 44% YoY.
Achieved a 10-year CAGR growth rate of over 20% for the treasury book.
Market Trends and Future Outlook:
Anticipates significant growth in household savings from $14 tn to nearly $126 tn over the next 25 years, with an expected increase in financial savings and equity allocation.
Management remains optimistic about future earnings growth and return ratios supported by strong market positioning and brand strength.
Plans to maintain a focus on quality advice and client relationships while navigating market volatility.
Emphasis on cross-selling capabilities and expanding product offerings in response to market demands and regulatory changes.
