MOFS Reports Highest Ever PAT Of Rs.26 Bn

Motilal Oswal Financial Services Declared 3 Bonus Shares for 1 Fully Paid up Equity Share

Mr Motilal Oswal, MD & CEO

FinTech BizNews Service   

Mumbai, April 26, 2024: Motilal Oswal Financial Services Ltd. announced its results for the quarter and financial year ended March 31, 2024 post approval by the Board of Directors at a meeting held in Mumbai on April 26, 2024.

Key Highlights

·        FY24 Consolidated PAT including Other Comprehensive Income (OCI) at Rs. 2,626 cr and Q4FY24 Consolidated PAT incl OCI at Rs. 625 cr. Consolidated RoE of 35%.

·        Consolidated operating revenue for FY24 at Rs. 5,075 cr, up 33% YoY and for Q4FY24 at Rs. 1,569 cr, up 60% YoY/29% QoQ.

·        Consolidated operating PAT for Q4FY24 at Rs. 495 cr, up 66% YoY/30% QoQ and for FY24 at Rs. 1,535 cr, up 38% YoY respectively. Operating RoE of 25%.

·        Delivered Highest ever quarterly and yearly Capital market business PAT of Rs. 251 cr, up 68% YoY/23% QoQ and Rs. 803 cr, up 47% YoY respectively.

·        Asset & Wealth Management businesses reported strong growth with PAT in Q4FY24 at Rs. 210 cr, up 79% YoY/ 46% QoQ and in FY24 at Rs. 607 cr, up 34% YoY.

·        Housing finance business PAT for the Q4FY24 and FY24 at Rs. 31 cr and Rs. 129 cr respectively

·        Robust Net worth of Rs. 8,732 cr as of March 31, 2024 up 40% YoY. 10-year Net Worth CAGR of 22%.

·        Declared 3 bonus shares for 1 fully paid up equity share

Speaking on the performance of the company, Mr. Motilal Oswal, MD & CEO said, “38% growth in FY24 Operating PAT to 1,535 cr and Consolidated PAT of 2,626 cr is a testimony to the structural tailwinds in our core businesses of capital markets and asset & wealth management. Capital market business remains significantly underpenetrated with most exciting 5 years ahead of us. Our presence in 98% of pin codes & 6% cross-sell ratio provides us with a ready base and headroom to grow our distribution business. With 95% of MOAMC strategies outperforming the benchmark, turnaround in Gross & Net Sales, presence across MF & Alternates, focus on equities and launch of new products, AMC business should once again take the growth leadership for MOFSL. Huge investments in our Wealth management business, strengthening of leadership across regions & functions combined with the wealth effect under way should all come together to make this business our next growth engine. HFC business reported 0.4% Net NPA and focus is back on growth with sales team doubled in FY24 and set to doubled again in FY25, paving way for doubling of disbursements. Such synchronized tailwinds and growth runways across our businesses are drivers to our large investments in talent, brand building and infrastructure. The unique twin engine of highly growth-high RoE Operating businesses and 18+% XIRR on treasury management has resulted in a Consolidated RoE of 35%, fueling undiluted growth and healthy payouts since our listing in 2007.”

Performance of Business Segments for the quarter and year ended March 31, 2024

Capital markets Businesses

·        Capital markets comprise of Retail Broking and Distribution, Institutional Equities and Investment Banking business.

·        Revenues grew to Rs. 982 cr, +68% YoY/28% QoQ in Q4FY24 and Rs. 3,235 cr, +37% YoY in FY24

·        PAT in Q4FY24 grew to Rs. 251 cr + 68% YoY/23% QoQ and Rs. 803 cr +47% YoY in FY24.

·        Overall ADTO grew 122% YoY / 26% QoQ to Rs. 7.2 lakh crore in Q4FY24.

·        In Retail Broking & Distribution, Retail Cash ADTO market share in Q4FY24 at 8.2%, up 307 bps YoY/68 bps QoQ.

·        Retail F&O Premium market share in Q4FY24 grew to 8.7% up 214 bps YoY/55 bps QoQ.

·        NSE active clients grew to 8.8 lakhs as of March 2024. Acquired 1.8 Lakh clients in Q4FY24 and 6.2 Lakh clients in FY24.

·        Industry added around 3.7 cr new demat account taking the total demat count to 15 cr. This addition signals a significant runway for sustained growth, with growth trajectory of over 20% for medium term.

·        Distribution AUM grew by 27% YoY at Rs. 27,038 cr as of March 31, 2024. Distribution Net Sales in Q4FY24 grew to Rs. 1,336 cr, up 169% YoY/73% QoQ and in FY24 grew to Rs. 3,046 cr, up 138% YoY.

·        Focus on ramping up distribution team strength (3x in 3 years) to improve customer penetration ratio of 6%

·        Net Interest income (NII) for the Q4FY24 at Rs. 200 cr, up 67% YoY /18% QoQ and for FY24 at Rs. 662 cr, up 42% YoY.

·        Investment Banking executed 17 deals worth ~Rs. 19,100 cr in FY24. Revenue for FY24 stood at Rs. 104 cr, up 232% YoY respectively. Pipeline of signed mandates provide strong growth visibility.

·        Capital Market PBT margin on Net Revenue improved to 48% in FY24 from 45% in FY23

Asset & Wealth Management businesses

·        Overall Asset and Wealth Management revenues for Q4FY24 was Rs 589 cr, up 58% YoY/37% QoQ and for FY24 was Rs. 1,774, up 31% YoY respectively. PAT for Q4FY24 was Rs. 210 cr up 79% YoY/46% QoQ and for FY24 was Rs. 607 cr, up 34% YoY respectively.

·        Asset Management business AUM across MF, PMS & AIF grew strongly to Rs. 71,810 cr, +57% YoY/11% QoQ. Revenues for Q4FY24 grew to Rs. 258 cr, +72%YoY/32% QoQ and for FY24 grew to Rs. 784 cr, +25% YoY respectively.

·        With 95% of strategies basis AUM outperforming benchmark, strong turnaround in AUM build up is visible with gross sales of Rs. 17,428 cr in FY24, up 116% YOY and exit quarter gross sales of Rs. 6,122 cr. Target is to double gross sales in FY25 led by strong traction in existing products and launch of new products.

·        MF AUM grew to Rs. 48,842 cr, up 65% YoY/14% QoQ.

·        Alternates AUM grew to Rs. 22,970 cr, up 41% YoY/4% QoQ. AIF AUM crossed Rs. 10,000 cr mark

·        Added 10 Lakh new SIPs in FY24. SIP flow for Q4FY24 stood at Rs. 967 cr vs Rs. 507 cr in Q4FY23. SIP AUM stood at Rs. 11,940 cr

·        Private Equity business fee earning AUM of Rs. 10,048 cr across three growth capital Private Equity funds and five Real Estate funds. Revenues in Q4FY24 grew Rs. 83 cr, up 39% YoY/84% QoQ and in FY24 grew to Rs.217 cr, up 18% YoY.

·        Plan to launch 5th Private Equity Growth Fund in FY25

·        Wealth & PCG AUM at Rs. 1,23,645 cr, up 78% YoY/11% QoQ as on March 31, 2024. Revenue for Q4FY24 grew to Rs. 248 cr, up 53% YoY/31% QoQ and for FY24 grew to Rs. 772 cr, up 41% YoY.

·        Added 110 RMs during the Q4FY24 and 177 RMs during FY24.

·        Incremental RM growth to be measured and strategic. Focus will be on improving productivity and margins

·        Strengthen product and advisory capabilities under new CIO

Housing finance business

·        Motilal Oswal Home Finance’s profit for Q4FY24 was Rs 31 cr and for FY24 was Rs. 129 cr respectively.

·        AUM grew to Rs 4,047 cr as on March 31, 2024, up 6% YoY/8% QoQ

·        Disbursements grew sharply to Rs 480 cr in Q4FY24, up 33% YoY / 94% QoQ and Rs. 1,017 cr in FY24.

·        Net Interest Income for Q4FY24 stood at Rs 78 cr and for FY24 stood at Rs. 312 respectively. NIM stood at 7.6% in FY24.

·        Yield on advances in FY24 increased to 14.2%, up 30 bps YoY with spread maintained at 5.9%.

·        GNPA/NNPA as on March 31, 2024 stood at 0.9%/0.4% respectively.

·        Net Gearing stands at 2.0x and CRAR remains robust at 51.0%. ROA of 3.2% in FY24

·        Sales force doubled in FY24 to reach 925 RMs. Aim to double again in FY25

·        New Leadership team geared up doubling disbursements in FY25

Treasury investments includes sponsor commitments to our AMC, PE & RE funds and strategic equity investments.

·        Total equity investment including alternate funds grew strongly to Rs 6,113 Crores as of March 31, 2024 up 41% YoY/4% QoQ. Robust XIRR since inception of 18.4%