Motilal Oswal Financial Services Ltd (MOFSL) has demonstrated exceptional performance in the recent quarter, marking significant growth despite a stagnant market environment. As stated in The Economic Times, the company’s assets under management (AUM) have surged by an impressive 55% year-on-year, driven largely by robust performances across its asset management, private wealth, and housing finance sectors.

AMC and Wealth Segments Propel Growth

The asset management and private wealth sectors were pivotal in driving such remarkable growth. MOFSL reported a net inflow of ₹14,000 crore, alongside the addition of 17 lakh new Systematic Investment Plans (SIPs). This inflow propelled their market share in the AUM sphere to 2.6%, with the flow market share reaching a notable 8.3%.

In the private wealth domain, MOFSL experienced ₹7,500 crore in net inflows—a nearly threefold increase from the previous year—with a substantial 75% sourced from existing clients. The ability to attract large family offices has been instrumental in fueling this growth.

Record-Breaking Operating Profits

Enduring market volatility, MOFSL reported an all-time high operating profit of ₹554 crore for the second quarter, reflecting a solid 30% increase year-on-year in core business profitability. Even though the treasury segment faced a notional mark-to-market loss of ₹270 crore, other divisions like asset management, alternates, investment banking, and wealth management, posted robust growth.

Despite regulatory changes causing a 24% decline in the brokerage sector, it now represents just 30% of MOFSL’s total revenue, indicating a successful diversification strategy.

Housing Finance Expansion

MOFSL’s housing finance division witnessed a 50% rise in quarterly disbursements, achieving a 24% year-on-year growth in AUM. The division’s focus on affordable housing, bolstered by solid underwriting practices and tech advancements, has resulted in gross NPAs of only 1.4% and net NPAs at a mere 0.8%.

The division also benefited from reduced funding costs, enhancing the spreads to 5.3% and maintaining stable net interest margins (NIMs) at 7%.

Charting Future Growth Paths

With substantial confidence in its high-return, fee-based business models, MOFSL is positioned for continued double-digit growth. The emphasis on asset quality and cost discipline is set to drive this expansion across various sectors. MOFSL’s progress reflects a well-balanced approach towards sustaining growth and profitability, securing its place as a leader in the financial services industry.