Detailed Narrative
Strong Operating Performance Driven by Annuity Businesses
Motilal Oswal Financial Services reported a robust FY26 with operating profit after tax growing 16% YoY to ₹2,360 crores. The fourth quarter alone saw a 25% YoY growth in operating PAT, exiting with a run rate of ₹661 crores. This strong performance was primarily fueled by the Asset and Private Wealth Management businesses, which collectively saw their profits grow 33% in FY26 and now contribute approximately 50% of the total operating profit. Management expects this share to continue rising, highlighting the increasing quality and predictability of the group's cash flows.
Asset and Private Wealth Management Momentum
The Asset and Private Wealth Management businesses demonstrated significant momentum, achieving robust net flows of ₹70,000 crores and an AUM of ₹3.7 lakh crores, representing a 34% YoY increase. Within Asset Management, AMC AUM crossed ₹1.5 Lakh Crores, with SIP flows for FY26 reaching over ₹16,000 Cr, up 78% YoY, contributing to a SIP AUM book of ~₹30,000 cr. The company anticipates 8 funds to cross the 3-year vintage mark by March 2027 and 16 funds by March 2028, which is expected to further boost flows and market share.
Capital Markets Business Rebound and Investment Banking Strength
The Capital Markets business, despite facing regulatory headwinds and lower volumes in parts of FY26, showed signs of recovery in Q4. Brokerage revenue grew approximately 33% YoY in Q4FY26, with management expecting a catch-up in coming periods as regulatory impacts subside. The Investment Banking division had an eventful FY26, successfully completing 52 deals with a cumulative raise of ₹83,600 cr, leading to a strong 39% YoY growth in fees income to ₹309 Cr. The company aims to expand its IB coverage from 360 to nearly 500 companies.
Housing Finance Business Sustains Growth
The Housing Finance business concluded another solid year, with adjusted disbursements growing 28% YoY to ₹2,291 Crores. Consequently, its adjusted AUM grew 25% to ₹6,100 Crs. The company successfully raised $100 million from the Asian Development Bank, validating its strong franchise. Management expects the Housing Finance business to witness strong growth over the next 2-3 years, supported by its strong capital adequacy ratio and low leverage.
Impact of Mark-to-Market Losses and Regulatory Environment
The total profit after taxes for Q4 and FY26 was impacted by a notional mark-to-market loss of approximately ₹1,000 crores on the company's ₹9,000 crores investment book. Management clarified that these are unrealized losses, with most already recouped in April 2026. The operating performance was delivered amidst a challenging external environment, including weak markets and multiple regulatory changes such as F&O adjustments and higher margin requirements, which impacted market breadth and certain business segments.
Strategic Investments and Future Outlook
Motilal Oswal Financial Services continued its investments across the group in FY26, focusing on people, brand, and technology, including embedding AI in business processes. The company is now ranked among the top 150 companies by PAT and top 200 by market capitalization. Management expressed confidence in the next decade, anticipating equally exciting prospects driven by financialization of savings and the rising weight of the capital market sector within India's economy, which should further improve its rankings.