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Motilal Oswal Q2 Results: PAT nearly quadruples to Rs 1,070 crore; revenue up 20%

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In short

Asset management has emerged as the primary growth engine for Motilal Oswal Financial Services, delivering 43% of total operating profit in the second quarter. The combined asset and private wealth units offset a slight downturn in the capital markets segment. Additionally, the firm's treasury investment book expanded 27% year-on-year to reach Rs 11,346 crore.

Key points

  • Recurring revenues now account for two-thirds of total revenue, which management believes…: Recurring revenues now account for two-thirds of total revenue, which management believes provides greater earnings stability.
  • Capital markets profit after tax softened by 5% year-on-year to settle at Rs 85 crore.: Capital markets profit after tax softened by 5% year-on-year to settle at Rs 85 crore.
  • Combined asset and private wealth management profit after tax advanced 43% to Rs 416 cror…: Combined asset and private wealth management profit after tax advanced 43% to Rs 416 crore.

Sources checked by our analysis pipeline: 1

The company's total PAT, including other comprehensive income (OCI), surged to Rs 1,070 crore from Rs 285 crore in the corresponding quarter last year, representing a nearly fourfold increase.

However, total PAT declined 29% sequentially from Rs 1,513 crore in the June quarter, reflecting lower mark-to-market gains on treasury investments. Operating PAT increased 18% quarter-on-quarter from Rs 609 crore.

Net operating revenue rose 20% YoY to Rs 1,757 crore from Rs 1,460 crore, while increasing 14% sequentially from Rs 1,538 crore.

Profit before tax from operating businesses increased 26% to Rs 933 crore from Rs 739 crore, while the operating PBT margin improved to 53% from 51%.

Motilal Oswal's asset management business emerged as the biggest contributor to earnings growth, reporting a 69% YoY increase in PAT to Rs 304 crore from Rs 180 crore.

The segment accounted for 43% of the company's operating profit during the quarter. Total assets under management (AUM) in the asset management business increased 26% YoY to Rs 2.23 lakh crore.

Within this, the mutual fund, portfolio management services and alternative investment funds business managed…

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