Detailed Narrative
Strong Annuity Business Growth and Diversification
Motilal Oswal's Q2 FY26 performance was significantly bolstered by its annuity businesses, with Asset and Private Wealth segments growing 36% YoY. The company's Annual Recurring Revenue now constitutes 61% of total net revenues, and fee-based revenue contributes 45% of total revenues. This strategic shift towards recurring revenue streams provides stability and predictability to earnings, underpinning the company's resilient performance.
Asset Management Momentum and Market Share Gains
The Asset Management business continued its strong momentum, with net flows increasing 56% YoY to ₹20,011 crores in Q2 FY26. AMC AUM grew 46% YoY to ₹1.6 Lakh Crores as of September 30, 2025, with MF AUM market share reaching an all-time high of 2.6%. The company also reported a 4.8% SIP flow market share, its highest ever, demonstrating strong traction in systematic investment plans and outperforming 91% of its benchmarks over the past three years.
Private Wealth Management Expansion and Productivity
The Private Wealth Management business showed robust growth, with Net Sales increasing 3x in Q2 FY26 to ₹7,358 crores, bringing total AUM to ₹1.87 Lakh Crores serving over 7,000 families. The segment recorded 20% YoY revenue growth and 22% YoY PAT growth. This growth is supported by a strong RM force of 386, with 48% having over 3 years of vintage, indicating improving productivity and contributing to better margins going forward⏳.
Investment Banking Leadership and Healthy Pipeline
Motilal Oswal maintained its #1 ranking in the IPO, QIP, and Rights Issue league table for H1 FY26, having executed 39 deals with a cumulative issue size of approximately ₹49,000 crores. The Investment Banking fees income delivered a robust 65% YoY growth to ₹120 crores. Management anticipates similar strong growth and profitability in the Capital Market segment for the second half of the year, backed by a 'very healthy deal pipeline' and sound market conditions.
Credit Rating Upgrade and Strong Balance Sheet
The company's long-term credit rating was upgraded to AA+ with a stable outlook, marking the highest ever for a non-bank domestic capital market player in India. This upgrade reflects the strength of its diversified business model, predictable recurring revenue, and disciplined financial management. The net worth has grown nearly 10x from March 2015 to ₹12,871 crores as of September 2025, supported by a 31% Operating PAT CAGR and 22% average ROE over the last decade.
Strategic Focus on Alternates and Lending Book Growth
Motilal Oswal is actively expanding its Alternates business, with the first close of its fifth Private Equity fund (IBEF V) at ₹6,900 crores, targeting ₹8,350 crores. The company also plans to launch a Private Credit vertical soon to tap into the large market. Furthermore, the lending book across Wealth Management and Housing Finance is projected to grow at a CAGR of approximately 25% over the next few years, leveraging the company's strong balance sheet and improving access to institutional capital.
SEBI Consultation Paper and Treasury Volatility
Management acknowledged the preliminary impact of the SEBI consultation paper could be 1-2% on Group Operating PAT, with industry representations ongoing. While treasury investments have shown a healthy 18.7% XIRR since inception and 42% CAGR, short-term volatility in reported PAT was noted, with a loss in Q2 FY26 following a gain in Q1. Management clarified that treasury is part of their 'twin-engine model' and short-term fluctuations are expected due to market movements, emphasizing long-term performance.