Motilal Oswal Financial Services Ltd's Q1FY19 consolidated net profit declines 17.55% yoy to Rs103.80cr

The company’s consolidated total income stood at Rs646.50cr, up 9.89% yoy

Aug 22, 2018 04:08 IST India Infoline Research Team

Motilal Oswal Financial Services Ltd Q1FY19

Consolidated Results Q1FY19: (Rs. in cr)

Q1FY19 YoY (%)
Total operating revenue 646.5 9.9%
Revenue - Broking business 288.5 21.8%
NII - Aspire HF business 57.6 14.5%
GNPA (%) - Aspire HF business 6.8 520
NNPA (%) Aspire HF business 5.6 430
Net profit (adjusted) 103.8 -17.5%
GNPA and NNPA change in bps

Motilal Oswal Financial Services Ltd’s revenue grew by 9.9% yoy to Rs646cr. Revenue of broking business and NII of Aspire Housing Finance business grew by 21.8% and 14.5% yoy to Rs289cr and Rs58cr respectively. In its Aspire business, GNPA and NNPA stood at 6.8% and 5.6% respectively, which grew by 520bps and 430bps yoy respectively. Company’s adjusted Net profit stood at Rs104cr, down 17.5% yoy.

• ADTO (Average daily turnover) of broking business grew by 54% yoy to ~Rs16,200cr.
• AUM of asset management business grew by 55% yoy to ~Rs37,600cr.
• Aspire home finance loan book grew by 11% yoy to ~Rs4,800cr.
• Wealth management AUM grew by 35% yoy to ~Rs15,300cr.
• Operating expenses stood at 22.3% of sales vs 21.1% yoy impacting the profitability.
• Administrative and other expenses stood at 16% of sales vs 12.7%.

Con Call Highlights

• Company’s market shares in overall broking business stands at 1.8% in Q1FY19.
• Equity MF AUM market share stands at ~2% in Q1FY19 vs. 1.6% yoy.
• Profit of the broking business grew by 120% yoy to Rs56cr. This was driven by strong volume growth and operating leverage. Further, management also mentioned that tax rate is lower by ~600bps in broking business post-merger of MOSL and MOFSL, which is sustainable going ahead. 
• In Wealth management, company has guided RM addition of 60%yoy in FY19E. EBITDA of wealth management stands at Rs4.4cr while total revenue stands at Rs26.4cr. Company expects EBITDA margin to improve further once RM addition closes down.
• No proposal for separate listing of AMC business, as there is no need for capital.
• Company has ~Rs1,600cr as of Q1FY19 in liquid investments to fund future investments. Further, gearing remains conservative at 1.8x (ex-Aspire it is 0.5x).

Technical View:

Motilal Oswal Financial Services Ltd ended at Rs. 846.90, down by 21.4 points or 2.46% from its previous closing of Rs. 868.30 on the BSE.
The scrip opened at Rs. 872 and touched a high and low of Rs. 873.80 and Rs. 843.10 respectively. A total of 1,44,005 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.

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