Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services reported its highest-ever quarterly profit after tax of ₹1,430 crores, marking a 40% YoY increase. Operating profit after tax also grew by 21% YoY to ₹522 crores, primarily driven by asset and private wealth businesses. The company's net worth reached ₹12,537 crores, up 28% YoY, with an annualized ROE of 48% for the quarter. Annual recurring revenues now constitute 52% of net revenue, and fee-based revenue contributes 44% to total revenues.

The wealth management business is strategically shifting towards distribution, with broking revenue contribution declining from over 60% in FY21 to 34% in Q1FY26. Distribution net flows reached ₹3,042 crores, growing the distribution book to ₹38,129 crores from ₹11,032 crores in March'21. The company aims for distribution and NII to outgrow the broking business in the coming years, supported by a dedicated team of 600-700 members for third-party products and an expected sequential uptick in NII.

The AMC business achieved a significant milestone with ₹1.5 lakh crores in equity AUM, driven by strong investment performance and market share gains. Gross flows increased 59% YoY to ₹14,568 crores, with current AUM at ₹1.51 lakh crores. The private wealth management business saw robust top-line growth of 53% and bottom-line growth of 49% YoY, expanding its relationship manager base to 615 and serving approximately 16,600 families, up from 13,400 last year.

The capital markets business reported its highest-ever revenues, completing 16 deals with a cumulative issue size exceeding ₹29,500 crores, leading to an 89% YoY growth in fee income. The investment banking business was ranked #3 in IPO numbers and #5 in IPO value, a significant improvement from last year. Management expects the strong performance to continue in coming quarters, citing a robust deal pipeline and continued leadership in QIP league tables.

The housing finance business crossed ₹5,000 crores in AUM, representing a 22% YoY growth. This was supported by a 50% YoY increase in the sales RM force to 1,430 RMs, which led to a 57% growth in disbursements to nearly ₹400 crores. Gross NPA stood at 1.2% and Net NPA at 0.6%. Management expects AUM to double in the next 2-3 years, emphasizing a strong capital adequacy ratio and low leverage.

The company is making significant investments in talent and technology, with employee expenses increasing 34% YoY and 23% QoQ due to senior talent acquisition (450+ hires in 18 months) and annual increments. Management expects employee costs as a percentage of revenue to remain similar to last year for the full year. Technology spends are budgeted at approximately ₹250 crores for FY26, with 75-80% of transactions now online and new AI-based tools being developed for enhanced client experience.

Motilal Oswal's net worth has grown nearly 10x between March 2015 and June 2025 to ₹12,537 crores, driven by an average ROE of over 22% and consistent dividend payouts. The company launched its fifth private equity fund with a target size of ₹8,000 crores, achieving an 80% first close, and announced the final close of its Series VI real estate fund. A new private credit vertical was also launched to expand its bouquet of alternate offerings and address a higher total addressable market.