Motilal Oswal Financial Services Ltd

About the Company:

Motilal Oswal Financial Services Limited (MOFSL) was incorporated on May 18, 2005 and received the certificate of commencement of business on June 3, 2005. MOFSL is a Non-Banking Financial Company (NBFC), registered under the Reserve Bank of India Act, 1934. The Company offers a diversified range of financial products and services such as Institutional Equities, Asset Management Business, Housing Finance, Currency Broking, Private Equity, Private Wealth Management, Commodity Broking, Investment Banking, Loan Against Securities, Retail Broking and Distribution and Investment Activities. It has a diversified client base including retail customers (including High Net Worth Individuals), Mutual Funds, Foreign Institutional Investors (FIIs), Financial Institutions and Corporate Clients. The Company carries its lending business by running Loan against Shares book and retail mortgage-backed lending under the name of 'Aspire Home Finance'.

In the year 2006, Motilal Oswal Securities Ltd became a subsidiary of the company upon acquisition of shares of MOSL from the promoters Motilal Oswal and Raamdeo Agrawal and some members of promoter group. Also, Motilal Oswal Commodities Broker Pvt Ltd became a subsidiary of the company upon acquisition of shares from promoter. During the year, the company acquired Motilal Oswal Venture Capital Advisors Pvt Ltd and Motilal Oswal Investment Advisors Pvt Ltd from promoters Motilal Oswal and Raamdeo Agrawal and thus those companies became the subsidiaries of the company. Also, Motilal Oswal Securities Ltd acquired customer rights and other assets of Peninsular Capital Markets Limited, broking entity based in Kerala.

During the year 2007-08, the company implemented a fully automated web-based back-office application for mutual fund distribution, which can be accessed across the country. Also, Motilal Oswal Capital Markets Pvt. Ltd became the subsidiary of Motilal Oswal Securities Ltd and, in turn of the company.

The company has a network spread 550+ cities and towns comprising 2,500+ Business Locations operated by their Business Partners, 9200+ Wealth managers, 2000+ Rms, 100+ Research team and have 6.5 lakh Cr as Assets under Advice and serves 8.6+ mn as AMC folios and 5.0+ mn as Broking clients.

Business Segments:

Company’s business segments include Wealth management, Capital market, Asset and Private Wealth Management, Home Finance and Treasury Investments.

Wealth Management: Under Wealth management business, company is No. 1 full-service broking house by gross brokerage revenue & highest broking ARPU in the industry with a Market share of 7.1% in Cash and 7.9% in F&O Premium Turnover segment. It has 1,429 Internal Relationship Managers, 74 Branches and 9,262 External Wealth Managers serving 1.5 Mn+ Total Active Clients and AUM of Rs. 2 Mn and AUM Rs. 29cr. AUM per Rm and 144 clients per Rm. Company’s Total Clients reached 13.6+ mn. Marking 88% YoY growth and NSE Active Clients reached 1Mn with 8% YoY Growth.

Asset & Private Wealth Management: Under Asset and Private Wealth Management, company has AUM of ₹3.3 lakh Cr. Under Asset management business company invests in Listed Equities MF + PMS + AIF (CAT III), Unlisted Private Equity + Real Estate Funds (CAT II) and recently forayed into Forayed in Private Credit business. Company’s fee earning AUM stands at 1.61 Lakh Cr. Under Private Wealth Managemnt company focus on catering to the HNI & UHNI clients with a net worth of more than ₹5 Cr and they are managed by High quality team of 615 RMs; 3+ years vintage of 33% and have Growing clients assets under management of ₹1.7 lakh Cr.

Capital Markets: Under capital markets business company covers 320 companies across 25 sectors, valuing ~73% of India’s market-cap under Institutional equity and it is managed by a Strong team of 150+ employees catering to 890+ institutional clients. In Investment banking company has completed 16 deals with total issue size of ₹29,500+ Cr during Q1FY26 and have best ever deal mandate pipeline which will help the share in IB league table to further rise. Company is Ranked No.1 in QIP and No. 3 in IPO League Table.

Home Finance: Under Home finance segment company is Building retail granular book with wide geographical distribution and maintaining asset quality. It is expanding RM Strength to drive Disbursement growth and have a Credit rating of AA with Positive outlook (by all three credit rating agencies).

Treasury Investments: Under treasury investments company has generated Healthy returns at 20.1% XIRR since FY14. Its Skin in the game stands at 11000+Cr comprising of Sponsor and Promoters.

Fundamentals:

Financial Results:

In Q1Fy26, company Recorded the highest ever quarterly PAT of ₹ 1,430 Cr. and its AUM crossed 1.5Mn mark. Company’s Assets under advice was Rs. 6.5 Lakh Cr. with 28% Yoy growth, its Net Operating Revenue stands at 1412Cr. with 24% YoY growth and Operating PAT rose to 522Cr. with 21% YoY growth.

On segmental front Company generated 359Cr. Revenue from Brokerage, 398Cr. from NII, 327cr. from Management fees and Advisory, 305Cr. from Distribution and 42Cr. from other operating avenues.

Under Wealth Management division, company reported AUM Base of 312506 Cr. with 18% growth and 174Cr. Pat in Fy25. with minor setback from 177Cr. in Fy25. Its Distribution business generated 135Cr. in revenue with 152% jump in Q1Fy26 and it contributed 26% of the total revenue generation in Wealth management business segment which clogged Net sales of 3042Cr. which is almost 2x growth from previous quarter.

Under Asset & Private Wealth business, company reported Net Sales of 11603Cr. with 26% growth and Pat of 224Cr. with 43% growth. It contributed 43% of Group PAT. Company’s Total MF Net Sales’ Flow market share grew by 7.7%, SIP market share was at 4.3% and AUM market share was at 2.4% in Q1Fy26. Its Individual AUM reached 1,00,967 Cr. which is 86% of Total AUM and registered MF Unique Customers (Mn.) base of 8.5Mn. with 15% market penetration.

Under Capital markets business segment, company reported net revenue of 207Cr. with 54% growth and PAT of 94Cr. with 64% growth in Q1Fy26. Under the Home Finance segment company disbursed 395Cr. marking 57% growth and its Loan Book reached 5,006 with 22% growth and Sales RM reached 1430 amrking 50% growth in Q1Fy26. Company’s NII reached 94Cr. and Networth reached 1460Cr. with 11% growth in Q1Fy26.

Company’s Treasury investment business segment reported investment of 8853Cr. with PAT incl. OCI of 908Cr. in Fy26.   

Key Highlights:

• Company’s market cap has outperformed the Nifty 500 Index by 16% CAGR, Assets under Advice have posted 39% CAGR in the last decade and Profit growth has been higher than revenue growth.
• Motilal Oswal Mutual Fund (‘MOMF’) recently the launched its New Fund Offer (NFO) ‘Motilal Oswal Special Opportunities Fund’ (‘the scheme), an open-ended equity scheme following special situation’s theme.
• Motilal Oswal Alternates (“MO Alternates”),the alternative investments arm of Motilal Oswal Group, recently announced the final close of its sixth real estate fund – Indian Realty Excellence Fund VI (IREF-VI), raising commitments aggregating to INR 2,000 crore. This latest fundraise marks a remarkable 65% growth compared to its predecessor and ranks among the largest and fastest domestic capital raises in India’s real estate credit space. A significant portion of the capital for this fund has been raised from family offices and Indian HNIs, reflecting strong domestic conviction in real estate credit as a resilient and rewarding asset class. The Fund has also received commitments from offshore investors through the GIFT City route, highlighting growing global confidence in Indian real estate.
• IFC has signed an agreement to invest in Motilal Oswal Alternates’fifth vintage fund to help mid-market companies in India expand, adopt advancedtechnology, and create jobs in sectors such as consumer, financial services,life sciences, and manufacturing. IFC will be making a $60 million equity investment inIndia Business Excellence Fund V G, which is managed by MO Alternates, theprivate investment arm of financial services conglomerate Motilal Oswal FinancialServices Ltd. IFC’s investment in the fund will be made along with anadditional $60 million co-investment envelope that will allow IFC toselectively invest alongside the fund in future deals.

Conclusion:

Motilal Oswal Financial Services Ltd. stands out as a well-diversified and agile player in India’s financial services landscape. With a presence across key verticals such as retail broking, asset management, wealth management, and investment banking, the company benefits from a robust business model that leverages both cyclical and non-cyclical revenue streams. Over the years, it has demonstrated resilience through market cycles, supported by strong brand equity, expanding client base, and a strategic focus on digital transformation.

Fundamentally, Motilal Oswal has shown consistent revenue growth, improving profitability metrics, and prudent capital allocation. Its asset-light model, coupled with scalable platforms in broking and asset management, enhances return on equity and positions it well to capitalize on India’s growing financialization and increasing investor participation in equity markets.

However, like all capital market-linked businesses, it is not without risks. Market volatility, regulatory shifts, and fluctuations in investor sentiment can influence performance in the short term. Yet, for investors with a long-term horizon, these fluctuations may offer entry opportunities into a fundamentally sound company.

In summary, Motilal Oswal Financial Services Ltd. presents a compelling investment case for those seeking to participate in the structural growth of India’s capital markets through a trusted and proven financial services institution. Prudent investors may consider it as a part of a diversified portfolio, keeping in mind both its growth potential and cyclical nature.

HET ZAVERI
info@smartinvestment.in

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