MOTILALOFSNSEQ2FY 2022-23October 28, 2022

Motilal Oswal Financial Services Limited

4,038words
63turns
4analyst exchanges
3executives
Management on call
Raamdeo Agarwal
Chairman; Mr.
Navin Agarwal
Director and CEO, AMC; Mr. Ajay Menon – CEO, Broking;
Shalibhadra Shah
Key numbers — 40 extracted
Rs. 509 Crore
for the quarter. During the quarter, we reported one of the highest quarterly profit after tax of Rs. 509 Crores which is up by 11% year-on-year, this is our profit excluding the private equity profit share. O
11%
arter, we reported one of the highest quarterly profit after tax of Rs. 509 Crores which is up by 11% year-on-year, this is our profit excluding the private equity profit share. Our operating profit
16%
ty profit share. Our operating profit without considering the private equity profit share grew by 16% year-on-year and 22% quarter-on-quarter to Rs. 221 Crores. The core businesses were robust with c
22%
operating profit without considering the private equity profit share grew by 16% year-on-year and 22% quarter-on-quarter to Rs. 221 Crores. The core businesses were robust with capital market busines
Rs. 221 Crore
onsidering the private equity profit share grew by 16% year-on-year and 22% quarter-on-quarter to Rs. 221 Crores. The core businesses were robust with capital market business profits being up by 9% year-on-yea
9%
Rs. 221 Crores. The core businesses were robust with capital market business profits being up by 9% year-on-year and 46% quarter-on-quarter to Rs. 132 Crores, asset and wealth business reported pro
46%
core businesses were robust with capital market business profits being up by 9% year-on-year and 46% quarter-on-quarter to Rs. 132 Crores, asset and wealth business reported profit after tax of Rs.
Rs. 132 Crore
st with capital market business profits being up by 9% year-on-year and 46% quarter-on-quarter to Rs. 132 Crores, asset and wealth business reported profit after tax of Rs. 66.7 Crores up by 2% year-on-year an
Rs. 66.7 Crore
46% quarter-on-quarter to Rs. 132 Crores, asset and wealth business reported profit after tax of Rs. 66.7 Crores up by 2% year-on-year and up by 15% quarter-on- quarter. We saw traction in the home finance busi
2%
r to Rs. 132 Crores, asset and wealth business reported profit after tax of Rs. 66.7 Crores up by 2% year-on-year and up by 15% quarter-on- quarter. We saw traction in the home finance business and t
15%
and wealth business reported profit after tax of Rs. 66.7 Crores up by 2% year-on-year and up by 15% quarter-on- quarter. We saw traction in the home finance business and the business reported a prof
Rs. 33.4 Crore
er-on- quarter. We saw traction in the home finance business and the business reported a profit of Rs. 33.4 Crores up by 67% year-on-year and up by 4% quarter-on-quarter. Our consolidated net worth stands at Rs.
Advertisement
Guidance — 7 items
Navin Agarwal
opening
“We expect this to result in improved gross sales and reduction in redemption in the coming quarters.”
Navin Agarwal
opening
“4,500 Crores in the month of October and the full impact of this in terms of the top line and the bottom line of the business will be visible in the third quarter.”
Navin Agarwal
qa
“We see that coming back in the second half as well as in the coming years; however, the investment in the RM base is something that we expect to continue going forward.”
Ajay Menon
qa
“The difference can also be because of the mix between delivery turnover and the trading turnover, so the delivery brokerage will be different to our trading turnover.”
Vinod
qa
“Another question on the brokerage whatever we are running that funding book, so it seems like growing good, so how do we see the future in this particular funding, because that seems like an elephant in a room going forward the market looks I wanted your perspective on that particular area in the brokerage side?”
Vinod
qa
“One is suggesting that going forward if you can include one slide which says that what was the opening AUM then what was the net sales and what is the plus and minus in the Mark to Market and that makes your closing balance right or the closing AUM, so going forward if you can add that slide then probably we do not need to ask you can just go through the slide and we can understand, so for this quarter can you just let us know what is the net sales amount for the PMS and the mutual fund side?”
Vinod
qa
“Got it and now one more question on the private equity side, for profit sharing when the exit happens and at time how that is calculated, those are already part of our income right, we relate that there will be quarter and mostly MTM into our income, so when actually it happens at that time what is the implication comes, only the tax amount gets deducted or the actual profit gets included?”
Risks & concerns — 2 flagged
4,500 Crores in the month of October and the full impact of this in terms of the top line and the bottom line of the business will be visible in the third quarter.
— Navin Agarwal
Typically, year three onwards you start seeing profitability from the RM, so in the ramp up you will see some pressure on margin in this business, but eventually profitability should come back as the productivity builds up, also it should build up as the incremental additions fall as a proportion of the denominator base or the opening base.
— Navin Agarwal
Advertisement
Q&A — 4 exchanges
Q
Good evening everyone. Sir, I have couple of questions from my side, on the wealth management business, while the investments in hiring the team has resulted in drop in our margins, but how should we look at the growth outlook for may be next 12 to 18 months in terms of the top line growth, how should we look at the margins reverting back to the last year levels, so can you tell a bit for that?
Navin Agarwal
There are two things. Firstly, the investments in augmenting the RM basis likely to continue as we have highlighted in our earlier calls, even in the coming quarters and the next couple of years; however, this half year also saw a fall in the upfront income on a year-on-year basis. We had very strong alternate asset sales in the first half of last year and they were lower in the first half of this year, all of the other revenue line items within this business continue to grow on a year-on-year basis, so that was the second driver for the lower margins that we saw. We see that coming back in th
Q
Thank you first of all for giving me the opportunity. I am a retail investor, I just want to ask for extra time and for extra questions, so please allow me for that. Now, my first question is that the March 2022 year end, we had net worth of Rs 56.7 billion and now we have Rs 59.7 billion, so an increase of Rs. 300 Crores, but if we see the profit of the half year, it is Rs. 500 Crores, so I am not sure is there a mismatch between like Rs. 200 Crores some odd amount or how it is, if you can clarify that?
Navin Agarwal
We actually completed Rs.200 Crores buyback, so the differences on account of that, if you see in July month, we did Rs. 200 Crores buyback that will reduce the net. Got it. Now, on our brokerage segment, some questions I have, one in that our cash market turnover is up by almost like 50%, but the revenue is not up by 50% that is so much difference between the revenue up side or the turnover up side, so if you can clarify something like whether we have reduced our brokerage plans to some of the customers or kind of that? Cash market turnover is actually up 7% on a quarter-on-quarter, so there
Q
Thank you Sir for the opportunity. My first question is regarding funding book in capital market, we have reported quite a strong growth in Q2 on YoY basis, but this compared to other peers who were reported their results for Q2, we have seen kind of flat or negative growth in margin funding, so can you just explain what is the strategy that is inflate for us to grow this book?
Shalibhadra Shah
You are talking about the funding book right? Yes. Basically, we have good mix of clients on the cash market and the F&O, there is a decent push from our side on the PCG customers to build on to the funding book and because of our advisory base, we are able to get the clients to buy good ideas and based on that, the funding book has got increased during the last quarter on a quarter-on-quarter basis, so it is mainly to look at it because the MTF book which has now become very popular on the broking side that is also seeing traction, because of SEBI regulations of the margins, client also prefe
Q
On behalf of Motilal Oswal Financial Services I would like to thank every participant for attending the Q2 FY2023 con-call. In case of further queries please do get in touch with us. Thank you and have a Happy Diwali and Prosperous New Year. 8
Management
Speaking time
Navin Agarwal
12
Vinod
12
Sahej Mittal
11
Shalibhadra Shah
10
Ajay Menon
8
Moderator
5
Deepak Sonawane
5
Advertisement
Opening remarks
Navin Agarwal
Good evening friends and wish you all a very Happy Diwali. It is my pleasure to welcome all of you once again to the Motilal Oswal Financial Services earnings call for the second quarter of the financial year ending March 2023. Let me first start by taking you through the key performance highlights for the quarter. During the quarter, we reported one of the highest quarterly profit after tax of Rs. 509 Crores which is up by 11% year-on-year, this is our profit excluding the private equity profit share. Our operating profit without considering the private equity profit share grew by 16% year-on-year and 22% quarter-on-quarter to Rs. 221 Crores. The core businesses were robust with capital market business profits being up by 9% year-on-year and 46% quarter-on-quarter to Rs. 132 Crores, asset and wealth business reported profit after tax of Rs. 66.7 Crores up by 2% year-on-year and up by 15% quarter-on- quarter. We saw traction in the home finance business and the business reported a prof
Advertisement
← All transcriptsMOTILALOFS stock page →