BSE: 532892 ● NSE: MOTILALOFS ● Bloomberg: MOFS:IN ● Reuters: MOFS.BO ● www.motilaloswal.com
Motilal Oswal Financial Services Ltd
Investor Presentation | Sep 2015
2
Group structure and evolution
• Synopsis
• Business Mix
• Timeline
• How we grow our businesses
• Core management
• Corporate governance
Synopsis
3Data as on Sep 2015# through Motilal Oswal Securities Limited
100%
Motilal Oswal
Securities Ltd.
Institutional Equities
Broking & Distribution
Motilal Oswal
Investment
Advisors Pvt. Ltd.
Investment
Banking
MOPE Investment
Advisors Pvt Ltd.
Private Equity
Real Estate
100% 85% 100% #
Motilal Oswal Financial Services Ltd.
Motilal Oswal
Wealth Management
Ltd.
Wealth
Management
100% #
Motilal Oswal Asset
Management
Co. Ltd.
PMS, MF &
Offshore
Aspire Home
Finance Corporation
Limited
Housing Finance
98.77% #
Motilal Oswal
Commodities Broker
Private Ltd.
Commodity
Broking
100%
● Motilal Oswal Financial Services Ltd (MOFS) is a diversified financial services company across the following businesses:-
o Traditional Capital Markets – Retail Broking & Distribution, Institutional Equities, Wealth Management, Investment Banking
o Asset Management – Public Market Equities and Private Equity
o Home Finance – Affordable Housing Finance
o Fund Based Activities
● Its core-purpose is to enable Wealth Creation for all its clients – retail, HNIs, institutions and corporate. It focuses on its
‘Solid Research Solid Advice’ and ‘Knowledge First’ mantras, to project itself as a knowledge-driven organization
● In terms of size, MOFS serves 870,000+ clients, including 760,000+ retail clients and 580+ institutions. Its Pan-India network
is spread over 2,000+ locations across 600+ cities, including franchisee outlets and own branches
● As of Sep 2015, the net worth was `13.9 billion, gross debt was `15.8 billion and market capitalization was `41.7 billion
Mix of capital markets, annuity and linear businesses
Aspire Home Finance (Affordable
Housing Finance)
Asset Management (PMS)
Asset Management (Mutual Funds)
Private Equity (Real Estate)
Private Wealth Management
Retail Broking & Distribution
Institutional Equities
Investment Banking (M&A Advisory)
Investment Banking (Equity Capital
Markets)
4
Mature businesses
Recentbusinesses
Housing finance
Asset management
Traditional capital markets
Asset Management (Offshore)
New businesses
**Lending against Securities is run only as a support to the Broking business. It is not run as a separate business vertical from operations perspective
Private Equity (Growth Capital)
Fund based (capital allocation)
Lending against Securities
(NBFC Loan Book)**
Sponsor Commitments (to own MFs & PE funds)
Capital allocation (Aspire Housing Finance)
Timeline
5
Retail Broking
Institutional Equities
PMS
Distribution
Wealth Management
Private Equity
Investment Banking
Lending (LAS)
Mutual Funds
Housing Finance
1987 - 95
2006 - 2007
1996 - 2005
2014
2010
From a pure Brokerage to a Diversified Financial Services enterprise…
…to build a flexible, respected
and creative enterprise
How we grow our businesses
6
…by focusing on…
• Power of Entrepreneurship
• Long-term value creation
• Customer-centric approach
• Sustained competitive advantages
• Systems and process
• Ethics and integrity
• Judicious use of capital and resources
We nurture our businesses,
from birth to bloom…
…by focusing on…
Core management
7
Business Leadership
Support Leadership
Motilal OswalChairman Raamdeo AgarawalJt. Managing Director Navin AgarwalManaging Director
Senior Leadership
Vijay Kumar GoelWealth Management
Vishal TulsyanPrivate EquityAashish Somaiyaa Asset Management
Anil SachidanandHousing Finance
Rajat RajgarhiaInstitutional Equities
Ajay Menon
& Nikhil Daxini
Retail Broking &
Distribution
Ashutosh Maheshvari
& Girish NadkarniInvestment Banking
Ramnik ChhabraMarketingSameer KamathGroup CFO Sudhir DharHuman Resources
Corporate governance
● MOFSL is committed to ensuring compliance with
the best practices in corporate governance
● Composition of MOFSL’s Board of Directors:
o The Board currently consists of6Directors with
50% composition of Independent Directors
(3 Independent and 3 Non Independent)
● MOFSL has some major Board level Committees :
o Audit Committee
o Stakeholders Relationship Committee
o Nomination and Remuneration/Compensation
Committee
o Corporate Social Responsibility Committee;
o Risk Management Committee
o Asset Liability Management Committee
o ESOP Committee
o Debenture Committee
8
Independent Directors
• Mr Praveen Tripathi is the CEO of Magic9 Media & Consumer
Knowledge Pvt Ltd. He is the Chairman of the National Consumer
Classification System Committee and has also worked with
Pidilite, Hansa Consulting, Zenithmedia, Starcom/Leo Burnett etc
• Mr Vivek Paranjpe is an HR consultant with companies like
Reliance Industries, Blackstone etc. Prior to this, he was the
Director, HR Operations at HP Singapore, and has also worked
with Hotel Corp, Johnson & Johnson, Hindustan Lever etc
• Ms Sharda Agarwal co-founded a strategy marketing consulting
firm in 2005 where she consulted 100+ companies in ~175
assignments. She also set up a consulting oriented market
research firm ‘Market Gate Dimensions’ in 2011
• Ms Rekha Shah is the founder of Analyze N Control, which
provides solutions to capital markets. Prior to this, she had 16
years experience in capital markets in the manufacturing and
financial sector. She did her Business Management from
Jamnalal Bajaj Institute of Management Studies, Mumbai
Independent Directors – Motilal Oswal Financial Services LtdBoard & Committees
Independent Director – Motilal Oswal Securities Ltd
Data as on Sep 2015
9
Businesses and Strategy
• Broad progress against strategic priorities
• Concentrating on Scale, Efficiencies, Competitiveness
• Traditional capital markets
o Retail Broking: Time-tested model poised for scale
o Institutional Equities: Preferred broker across client segments
o Private Wealth: Deepening client relationships with advisory
o Investment Banking: Focusing on emerging opportunities
• Asset management
o Asset Management: Set to be a significant growth-driver
o Private Equity: Demonstrated track-record
• Housing finance
o Aspire Home Finance: Building a linear, high ROE business
• Fund based activities
Broad progress against strategic priorities
10
● Traditional Capital Markets
o Broking and Distribution: Building scale by leveraging on
advisory, network expansion and technology
o Institutional Equities: Pitch research as a USP; Use corporate
access and sales to build strong relationships
o Wealth Management: Customized advisory for holistic asset
allocation; Leverage strong relationships with HNIs
o Investment Banking: Leverage on emerging capital raising
opportunities by partnering as a ‘strategic CFO’
● Asset Management
o Public Equities AMC: Pitch as equity specialists with time-
tested investing philosophy; Expanding the distribution base
o Private Equity: Capture fundamentally-strong, high-quality and
high-growth deal opportunities
● Housing Finance
o Aspire Home Finance: Focus on affordable housing segment
● Fund based
o ROE Enhancing Opportunities through commitment to own
asset management products; NBFC book run with borrowings
Active participation in few IPOs
Superior investment performance; Uptick in market share of net sales and creation of new folios
Expanded coverage into new corporates/geographies
Improvement in retail cash market share
Traction in HNI client families and asset flows
Traction in Aspire’s book, clients & geographies
Sponsor backing of proven track-record of investing philosophy
2 partial exits from IBEF 1; Final close of IREF II
Concentrating on Scale, Efficiencies, Competitiveness
11
BUSINESS STRATEGY
Operational excellence in housing finance
● Focus on operations, technology, underwriting,
risk management, as much as scale & productivity
Investments aligned to capital market client segments
● Digital models for ‘next-generation’ retail clients
● Dedicated advisory desks for large clients
● Offline reach into high-potential geographies
● Institutional base where India is relatively attractive
● Expanding in family offices to cater to more HNIs
Track-record and B2B network in AMC products
● Products based on time-tested investment
philosophy delivered superior outperformance
● Building relationships with key distributors
GROUP STRATEGY
Strategically realigned our business model
● Annuity-based AMC and PE businesses , linear housing
finance business and capital allocation are
complementing the capital markets businesses
● Will offer significant profit potential, going forward
Using capital judiciously with focus on productivity
● Aimed to maximize throughput on investments
● Will help drive the next phase of growth
Building Scale, Efficiencies, Competitiveness
● Focus on operational processes for efficiencies
● Competitive positioning to stay ahead of the curve
● Adding scale via manpower, technology and reach
Retail Broking: Time-tested model poised for scale
12
‘Knowledge’ as a differentiator
● Simplified research customized for retail
● Dedicated advisory-desk per client-type
● Certification/tests for advisor quality
● Investor education seminars/trainings
Portfolio product-based approach
● Equity strategies are packaged into
portfolio products for clients
● System-driven trading products
developed in-house
‘Partnering For Growth’ Franchisee Model
● Leveraging entrepreneurial talent to
expand across the hinterland
● Several franchisee partners have grown
manifold in their scale of business
Profile-based advisory
● Targeted advisory based on profile/habits
● Disciplined trading system classifies stock
ideas as per different categories
Cross-selling of products
● Offering a bouquet of products to
deepen the client engagement:-
● Equity broking
● Commodity broking
● Currency trading
● Mutual Funds
● Bonds
● Insurance
Leveraging on Technology
● Revamping Digital initiatives across delivery
& engagement touch-points
● Helps reduce the cost of servicing and
enables clients to engage as per convenience
3,8873,199
1,833
H1FY16FY15FY14
Monthly runrate in retail client addition
Retail Broking: Investments leading to business results
Traction in Client Addition
● Retail client base of over ~760,000
● Strong run-rate in client addition,
since the last five successive quarters
● Online business also gaining traction
● Uptick in re-activation initiatives
Traction in Performance Metrics
● Improved the retail cash market share &
the client-activation ratio this year
● Expanding the reach with own-branches
in large geographies & with franchisees in
the hinterland
● Stress is on outlet quality, not quantity
Solid Endorsement
● Best Performing National Financial
Advisor – Equity Broker at the UTI-
CNBC TV18 Financial Advisor
Awards for 4 years in a row
● `Best Broking House - Cash
Segment` at Dun & Bradstreet
Equity Broking Awards 2015
2X vs. FY14 average
1.2X vs. FY15 average
1,579 1,484 1,5341,743
2,036
552 527 507 520
637
FY12 FY13 FY14 FY15 Q2FY16
Business Location No of cities
13
Institutional Equities: Preferred broker across client segments
14
Award-
winning
Research
Timely
Execution
Support
Engaging
Corporate
Access
Best in Class
Institutional
Broking
●Research covers economic,
sector, company and
thematic reports
●Coverage ramped up from
~200 to 230+ companies
since the last year
● Strong focus placed on
thematic research offerings
● Large team of 30+ analysts
●Client count reached 586
institutions
● Both FII and DII clients
empanelled since last year
● Invested into execution
capabilities like Blocks, DMA
& Smart Order Routing
● Invested into trading
segments like Algos/Quants
●Multiple outreach formats
to meet management,
government & experts
●Traction in analyst and
corporate roadshows in
FY15, across regions
●Annual Global Investor
Conference is one of the
largest format events in this
segment. The 2015 event
saw 4,000+ corporate –
investor meetings
● ‘Best Broking House -
Institutional Segment` at D&B
Equity Broking Awards 2015
●Best Local Brokerage (India)
for trading & execution by
Trade Asia Poll 2014
●Ranked 2 in Best Local
Brokerage, Best Overall Sales
Service, Best for Events & 3 in
Best for Most Independent
Research Brokerage in the
AsiaMoney Brokers Poll 2012
Institutional Equities: Deepening USP in research & outreach
15
Thematic research Sector research Company researchNew products Corporate access connect
Research and events require holistic engagement with institutional investors, corporates and industry experts …
● Wealth management AUM stood at ~`50.3 billion as of Sep 2015, a growth of 59% on a YoY basis
● The business has turned significantly profitable last year
Private Wealth: Deepening client relationships with advisory
• Tailor Structures
• Relationship
Measurement
• Personalized
Investment Strategies
Customized Financial
Strategy
• Investment Banking
Services
• Institutional Research
• Credit Solutions
Privileged Access to
Institutional Capabilities
• Investment Advisory
Committee
• Product Due Diligence
• Adherence to your risk
profile
Strong Risk
Management
• Multi Platform
Monitoring &
Transactions
• Institutional Approach
to Client Servicing
Exceptional Client
Experience
• Global Concierge
Services
• Premium Lifestyle
Memberships
• Travel Services
Relationship Benefits
16
● Expanding Coverage:-
o 64 Sales people on-board as of Sep, up 35% YoY
o Presence expanded to 8 metro cities to capitalize on the
ensuing growth prospects there
o Open-architecture platform provides the products which
are best suited for our clients’ interests
● Client-centric Focus-
o Building a strong Family Office offering, to cater to
further HNI clientele through this model
o Investing into providing a seamless execution platform
o Deepening relationships by supporting clients through
life events, especially younger-age clientele
Our Value Proposition – From personalized advice to exceptional experience
Investment Banking: Focusing on emerging opportunities
● Strength in M&A Financial Advisory; Deal pipeline remains healthy with transactions at various stages of completion
● Invested into an experienced ECM team to capitalize on the emerging opportunities in equity raisings, and some traction has
already been seen in the IPO segment this year with the Pennar, Powermech and Parag IPOs
● Extensive relationships with PE funds for Private Equity Syndication
● Tied up with IMAP Inc., a global provider of M&A services. This will allow it to undertake transactions across 30+ countries
● Won ‘M&A Boutique Firm of the Year’ award at the M&A Atlas Awards
Sample transactions across segments…
17
Asset Management: Set to be a significant growth-driver
Putting the Building-Blocks in place…
Solid Investing Philosophy
Q.G.L.P. investment
framework helped us
identify multibaggers
Cracking new distributors
across channels like banks,
wealth firms, IFAs & NDs
MOAMC now ranks #14
in the industry, up from
#18 in Mar 2014
Increase in the market
share of incremental
equity inflows
Buy and hold value
investing philosophy
MF Investment
performance getting
mentions in the media
Value PMS seen 27%
CAGR in last 13 years, 9%
higher than its benchmark
18
Empanelled distributors
are up 55% YoY
Time-tested Track-Record Distributor Relationships
Deepening relationships
with existing distributors
to maximize the share
Building relationships with
offshore institutions for
the new offshore fund
Concentrated portfolio
to reduce risk of
excessive diversification
NTDOP seen 18.5% CAGR
since 2007, 13% higher
than its benchmark
Measurable Results
Feature-rich online
platform adds convenience
to the Direct channel
Equity MF Folios are
up ~4X YoY
Asset Management: Equity specialists
Portfolio Management Services (PMS)
● The flagship Value PMS is our largest scheme and it
focuses on high-potential large-caps
● NTDOP PMS (Next Trillion Dollar Opportunity) looks at
high-potential midcaps
● As per SEBI, PMS had a market share of 8% within
discretionary-listed equity PMS space, as of Aug 2011
Offshore
● Motilal Oswal Asset Management (Mauritius) Pvt Ltd
incorporated in Mauritius to manage the India Zen Fund
Mutual Funds (MFs)
● Focused 25 Fund invests as per QGLP in largecaps
● Focused Midcap 30 invests as per QGLP in midcaps
● Focused Multicap 35 invests as per QGLP across market cap
● MOSt Focused Long Term combines QGLP with tax savings
● MOSt 10 Year Gilt Fund provides access to 10 Year G-Sec
● MOSt Ultra Short Term Bond Fund invests in debt market
Mutual Funds (ETFs)
● MOSt Shares M50 is based on NSE Nifty
● MOSt Shares Midcap 100 is based on CNX Nifty
● MOSt Shares Nasdaq 100 is India’s 1st US equities ETF
19
21.5
4.7
Q2FY16Q2FY15
Net Inflows into MF/PMS (Rs Bn)
4.5X
43.1
12.8
48.3
21.6
Q2FY16Q2FY15
MF AUM (Rs Bn)
PMS AUM (Rs Bn)
34.4
91.4
165%
Private Equity: Demonstrated track-record
20
Investment manager and advisor to private equity funds, and acts as an advisor and mentor to investee companies…
IBEF 1: $125 million invested in 13 cos. 2 investments are fully exited and 4 are partially exited,
translating to ~78% capital returned (INR terms). It is in advanced stages for exits, which may translate
to an additional ~32% capital returned, taking total capital returned to ~110%. It is likely to exit by
FY17 and we are hoping to earn meaningful carry as well as profits on Sponsor commitments in FY17.
IREF 1: `2 billion AUA in 7 deals, of which full/partial exits have been done from 6 projects so far,
translating into ~82% capital returned to investors
Funds in
Exit mode
Funds in
Investing mode
Fund in
Approval mode
IBEF 2: `9.5 billion raised, including commitments from marquee institutions like IFC Washington,
Squadron Capital and Axiom. It has made 7 investments so far - Magicrete, Intec Capital, Shubham
HFC, Glass Wall Systems, Arinna Lifesciences, IKF Finance and Kurlon
IREF 2: `5 billion commitments raised post final close. Commitments of ~80% have been made across
established developers across 6 deals, following stringent due diligence process
IREF 3: IREF 3 to be launched during FY16, for which the regulatory approval is expected very soon
Aspire Home Finance: Building a linear, high ROE business
● As of Sep 2015, equity commitment of `2
billion with a Debt:Equity ratio of 4X
● Distribution reach expanded to 37 branches
across Maharashtra, Gujarat, MP & Telangana
● As much focus on underwriting, file audit & risk
management, as on scale and productivity
● Technology implemented at each stage of the
loan approval process to reduce TATs
● Sanctioned credit lines of `14.1 billion
● Launched Aspire Insurance Services offering
life/non-life insurance; Aspire Property Services
& Aspire Technical Services to offer its domain
expertise in the housing industry
21
● Cumulative disbursement of `10 billion in 5 quarters
● Loan book at `9.9 billion, across ~9,700 families
● Q2FY16 disbursement was 2X of Q1FY16 and
Q4FY15, each
● As of Sep, NIM of ~300 bps, GNPL of 0.04%, Cost to
income ratio of 39%, ROA of ~3.8% & ROE of ~14%
● Relentless focus into operational excellence helped
get ratings of ‘CRISIL A+/Stable’ & ‘ICRA A+(Positive),
despite the relative lack of vintage
● ‘Most Admired and Valuable Housing Finance
Company’ at 6th India Leadership Conclave 2015
● Positive PAT in the first year of operations
What we achieved…What we did…
Fund based activities focusing on enhancing Return on Equity
22
In line with the long term strategy to grow RoE sustainably to 20%+, MOFSL has made strategic allocation of capital to long term
RoE enhancing opportunities like Aspire Home Finance, sponsor commitments to existing mutual fund and private equity funds
of MOFSL group and utilizing borrowings to run the NBFC loan book (as spread business):
Sponsor Commitments:
• As of Sep 2015, our investments in Motilal Oswal’s mutual fund products stood at `5.7 billion and the unrealized gain on
these investments was `1.7 billion (vs. `1.8 billion as of Jun 2015). The same is not reflected in the profit and loss account for
the year. By changing the allocation we have ensured that erstwhile deployment from low RoE cash future arbitrage
opportunities into opportunities to earn 20%+ RoE
• Our investments in Motilal Oswal’s alternative investment products (private equity and real estate funds) stands at `1.7
billion as of Jun 2015
NBFC Business:
• NBFC loan book was `3.3 billion
• The NBFC lending business of LAS, earlier done from equity capital, is now being run as a spread business. In line with this,
MOFSL has raised long-term NCDs of `1.5 billion at annualized cost of 10.05% (payable annually)
• Total borrowings in MOFSL (ex Aspire) was `7.3 billion as of Sep 2015. This resulted in incremental interest cost (ex Aspire) of
approx `6.0 million as compared to previous quarter and `111.7 million as compared to same quarter of last year
23
Financial performance
• Latest quarter performance
• New drivers for topline and profit growth
• Annual financial performance
• Balance sheet
• Recent awards
Latest quarter performance
24
Particulars Q2 FY16 Q1 FY16 Q2 FY16 Q2 FY15 6M FY16 6M FY15 FY15
`million Sep 30,
2015
Jun 30,
2015
Sep 30,
2015
Sep 30,
2014
Sep 30,
2015
Sep 30,
2014
Mar 31,
2015 Brokerage & operating income 1,314 1,160 13% 1,314 1,184 11% 2,474 2,346 5% 4843
Investment banking fees 73 49 49% 73 6 1093% 122 86 42% 193
Asset management fees 575 403 43% 575 214 169% 978 395 147% 1266
Fund based Income 261 285 -8% 261 338 -23% 546 566 -4% 1147
Housing finance related 457 207 121% 457 24 1787% 664 27 2321% 239
Other income 11 13 -17% 11 19 -42% 25 41 -40% 62
Total Revenues 2,691 2,116 27% 2,691 1,786 51% 4,808 3,462 39% 7750
Operating expenses 656 474 38% 656 462 42% 1,130 924 22% 1945
Personnel costs 574 582 -2% 574 384 50% 1,156 758 52% 1897
Other costs 420 363 16% 420 363 16% 783 625 25% 1313
Depreciation 83 76 9% 83 71 18% 160 138 16% 307
Interest 368 226 62% 368 29 1154% 594 68 771% 309
PBT 590 394 50% 590 477 24% 984 948 4% 1979
Tax 150 104 44% 150 143 5% 255 290 -12% 523
Minority Interest 6 6 8% 6 7 -15% 12 11 4% 20
Reported PAT 434 284 53% 434 327 33% 718 647 11% 1,436
EPS - Basic 3.1 2.0 3.1 2.4 0.5 0.5 1.0
EPS - Diluted 3.0 2.0 3.0 2.4 0.5 0.5 1.0
No.of shares outstanding
(million) - FV Rs 1/share142 141 142 139 142 139 140
Operating costs% 24% 22% 24% 26% 24% 27% 25%Personnel costs% 21% 28% 21% 21% 24% 22% 24%Other costs% 16% 17% 16% 20% 16% 18% 17%Reported PAT% 16% 13% 16% 18% 15% 19% 19%
Change
(%)
Y-o-Y
Change
(%)
Q-o-Q
Change
(%)
Y-o-Y
New drivers for topline and profit growth
25
Incremental revenues coming from AMC and HFC on a YoY basis
1,786
2,668
Q2 FY15 Broking &Related
IB Fee
AMC Fee (incl PE)
Fund based Inc
HFCrelated
OtherIncome
Q2 FY16
129
361
67
(8)
(77)
433
Change in the revenue mix towards annuity and linear businesses
1% 10%19%
17%1%
21%12%
3%
0%
49%66%
Q2 FY16Q2 FY15
Broking & Related
IB Fee
AMC Fee (incl PE)
HFC related
Fund based Inc
Others
4 drivers for future profitability
• During the previous cycle, our growth was driven by only one engine, i.e. the traditional capital market business. That alone
helped us deliver 10x growth in profits through the last cycle
• Now, we have 4 drivers - the traditional capital market business, asset management businesses, housing finance business and
fund based activities; which should help us capture the growth opportunities and thus, improve our profitability and ROE
10,595 11,409
12,179 11,703 12,949
14%9% 9%
3%
12%
FY11 FY12 FY13 FY14 FY15
Adjusted PAT (`million, margin %)EBIDTA (`million, margin %)
Annual financial performance
*Prior figures have been regrouped wherever necessary 26# For FY15; `2 is paid as interim dividend + `1 is proposed dividend• Payout is calculated on Adjusted PAT for the respective years
Consolidated revenues (`million)
Revenue Composition (%)Consistent dividendsNet worth (`million); ROE (%)
0.800.80 1.20
1.401.50
2.00 2.00
3.00
7%
13% 10%
17%
26%
35%
42%
35%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15#
DPS Payout*
6,008
4,711 4,729 4,681
7,750
FY11 FY12 FY13 FY14 FY15
2,295
1,5851,744
1,422
2,595
38%
34%37%
30%
33%
FY11 FY12 FY13 FY14 FY15
1,353
967 969771
1,436
23%21% 20%
16%19%
FY11 FY12 FY13 FY14 FY15
2% 1% 2% 1% 1%
13% 17% 21% 20% 14%3%7%
11% 13% 16% 16%7%
2%2% 1% 2%
72% 69% 63% 61% 63%
FY11 FY12 FY13 FY14 FY15
Broking & operating income Investment banking fees
Asset management fees Housing Finance
Funds based business Others
Balance sheet
27
`million As on Sep 30,
2015
As on Mar 31,
2015
Sources of Funds
Networth 13,914 12,949
Loan funds 15,754 7,856
Minority interest 100 63
Deferred tax liability 81 120
Total 29,849 20,988
Application of Funds
Fixed assets (net block) 2,977 3,001
Investments 11,895 8,140
Deferred tax asset - -
Current Assets (A) 24,800 18,307
- Sundry debtors 7,301 5,900
- Stock-in-trade 0 0
- Cash & Bank Balances 3,112 2,719
- Loans & Advances 13,956 9,605
- Other Assets 431 82
Current liabilities (B) 9,823 8,460
Net current assets (A-B) 14,976 9,847
Total 29,849 20,988
Recent awards
‘Best Capital Markets & Related NBFC’ award at
CNBC TV18 India Best Banks & Financial Institutions
Awards 2011
‘Most Innovative Fund of the Year’ award at the
CNBC TV18-CRISIL Mutual Fund Awards 2011 for the
M-50 ETF
'Best Performing National Financial Advisor Equity Broker' award at
CNBC TV18 Financial Advisor Awards for 4th year in a row
Investment Banking bagged ‘Asia Pacific Cross-Border Deal
of the Year’ and ‘India M&A Investment Banker’ awards
‘Best Equity Broker’ award at Bloomberg UTV
Financial Leadership Awards 2012
Private Equity won ‘Best Growth Capital Investor-
2012’ award at the Awards for PE Excellence 2013
Nasdaq 100 ETF won the ‘Most Innovative ETF Asia
Pacific 2011’ award at the 8th Annual Global ETF Awards
2012 in USA
Adjudged amongst Top 20 innovators in BFSI space at
the Banking Frontiers Finnovity Awards 2012
‘Best Research as Research Showcase Partner’ at Research
Bytes IC Awards 2014
Retail Broking and Distribution, Institutional Equities and Wealth Management
NBFC, Asset Management, Private Equity and Investment Banking
28
CNBC TV18 Financial Advisor Awards 2015 for the HNI wealth-distributor category
29
Industry trends
• Right Mix for Growth in the financial services space
• Economic story spells opportunity for savings & investments
• Equity market volumes
• FII and DII net flows
• Wealth management
• Mutual fund AUM/net inflows
• Private Equity activity
• Housing Finance
• Specialists and Super-stores both
co-existing for client segments
• Technology usage deepening
• Products have made a track-record
• Regulations more evolved & mature
• Intermediaries now more organized
• Working population is young
• Aspiring middle-class
• Per Capita GDP expected to rise
• Bank deposit returns falling short
• Low penetration means opportunity
• Acceptability of financial products
Right Mix
for Growth
Financial Services space set on a growth path in India…
30
Demand Side Supply Side
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
(12.0)
(10.0)
(8.0)
(6.0)
(4.0)
(2.0)
-
2.0
4.0
6.0
8.0
10.0
12.0
FY9
6
FY9
7
FY9
8
FY9
9
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
Differential between WPI Inflation % and Per Capita Income growth %
Changes in Fin. Assets - Shares & Debentures (Rs Bn)
7% 8%
4%
7%8%
4%5%
4%
8%7%
9% 10% 9%
7%
9% 9%
7%
4%
24%
30%
47%
68%
FY9
6
FY9
7
FY9
8
FY9
9
FY0
0
FY0
1
FY0
2
FY0
3
FY0
4
FY0
5
FY0
6
FY0
7
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
YoY Growth % in GDP (GDP at Constant Prices)
Gross Domestic Savings (GDS) as % of GDP
Household Financial Savings as % of Total Household Savings
India’s GDP growth is expected to outpace most large
Emerging Markets; This should augur well for continued
uptick in disposable income and savings because……
Economic story spells opportunity for savings & investments
Source: RBISource: IMF
31
……historically, periods of GDP growth helped boost
gross savings and financial savings levels; Also, savings
rate rose faster during periods of high GDP growth
6.9%
8.9%
5.9%
4.2%
3.0%
1.8% 2.
6%
1.9%
1.0% 1.2%
-0.1
%
0.7%
0.3%
6.3% 7.
0%
5.8%
5.0%
3.8%
3.5%
2.8%
2.8%
2.2% 2.
9%
2.5%
1.5%
1.0%
Ind
ia
Chin
a
Ind
on
esia
Mal
aysi
a
S. K
ore
a
Mex
ico
Bra
zil
S. A
fric
a
Rus
sia
USA U
K
Ger
man
y
Japa
n
Previous 5-Year CAGR (2008-13)
Projected 5-Year CAGR (2013-18)
Difference between inflation and personal income
growth impacts the ability to save, which coincided with
an increase in allocation towards equity investments
Source: RBI, CSO
76% 77% 78% 80% 77% 77%
16%16% 15%
14%16% 16%
5% 5% 4%4%
4% 5%2% 2% 2% 2% 2% 2%
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
Delivery Intraday Futures Options
39 40 65 61 67 6292 93 149 142 140 146275 325513 499 507 518
1,2741,565
2,614 2,806 2,4142,423
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
Options Futures Intraday Delivery
3,508
2,022
3,340
1,679
3,128 3,148
Cash ADTO flat QoQ, though retail cash picked up in Jul/Aug
Source: NSE, BSE
Source: NSE, BSE
32Source: NSE, BSE
Cash segment maintains its proportion within the overall volume mix on both QoQ and YoY basis
Proportion of delivery has held steady within the cash volume mix since the last year
Market ADTO flat QoQ across both cash and F&O; But it is lower YoY due to decline in option volumes (Rs Bn)
Retail cash volumes increased QoQ due to uptick in Jul/Aug; But it is marginally lower than FY15 averages
Source: CDSL, SEBI
49% 47% 50% 52% 47% 49%
23% 22% 21% 21%19% 21%
19% 22% 21% 19%25% 22%
9% 9% 8% 8% 9% 8%
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
DII FII Prop Retail
30%
70% Q2FY15
30%
70% Q2FY16
Delivery to Cash Volumes Intraday to Cash Volumes
1,400
797
1,113
236
26 -180
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
-1375
-542
-220
-20
321 273
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
FII seeing net outflows, while DII net inflows hold steady
Source: NSE
DIIs have registered net inflows since the last 8 months, following several quarters of net outflows (Rs Bn)
33
Demat accounts created in H2FY16 are 2X of the FY12-14 average, as the IPO market picks up slightly
Source: CDSL, NSDL
Source: NSE, BSE
FII flows were net sellers due to outflows in Aug/Sep; FII net inflows have declined this year vs. earlier years(Rs Bn)
Wealth management assets in India still lags the world in its allocation towards financial savings vs. physical savings
39% 43%
28% 14%
20%
19%
13%25%
Debt Alternative Real Estate Equity
India Global
Source: Karvy Report 2014
19.0 20.0 21.0 21.8 23.3
0.91.0 0.9 1.5
0.9
FY12 FY13 FY14 FY15 Sep-15
Existing Accounts (Mn) New Accounts (Mn)
(146
)
(93)
242 32
9
207
(2) 29
23
(2)
(8) 22
FY2013 FY2014 FY2015 Q2FY15 Q1FY16 Q2FY16
Equity Non-Gold ETF (Equity)
710
34% 27% 25%34% 36%
50% 56% 56%48% 46%
14% 13% 16% 15% 15%3% 3% 3% 3% 3%
FY12 FY13 FY14 FY15 Sep-15
Others Liquid / Money Market Income Equity
5,872 7,014 8,252 10,828 11,873
30%
31%
34%
36% 36%
37%
4.7
4.8
4.6
4.7
4.6
4.4
FY10 FY11 FY12 FY13 FY14 FY15
HFCs' market share
Home loan affordability (Property cost/annual income)
Interest strong in equity MFs; Opportunities galore in HFC market
Source: AMFI
Equity MFs registered significant, and sustained, net inflows since the last five successive quarters (Rs Bn)
Source: NHB, Banco Espirito Santo report, HDFC
Source: AMFI
MF AUM reach a high of `11.9 trillion, led largely by the resurgence in equity MF assets (Rs Bn)
Home Loans are becoming more affordable vs. Income, while Market share of HFCs is steadily increasing
8.5 8.6
11.8
2.6
4.3
5.9 17.4 18.022.4 20.7
28.1
33.0
FY13 FY14 FY15 Q2FY15 Q1FY16 Q2FY16
Deal Value (US$ Bn) Avg Deal Size (US$ Mn)
Source:: Venture Intelligence
PE deal values and average deal size picked up this quarter owing to deals like Flipkart, Snapdeal, ACT, Intelenet & Greenko
34
This report is for information purposes only and does not construe to be any investment, legal or taxation advice. It is not intended as an offer or
solicitation for the purchase or sale of any financial instrument. Any action taken by you on the basis of the information contained herein is your
responsibility alone and MOFSL and its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences
of such action taken by you. We have exercised due diligence in checking the correctness and authenticity of the information contained herein,
but do not represent that it is accurate or complete. MOFSL or any of its subsidiaries or associates or employees shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this publication. The
recipient of this report should rely on their own investigations. MOFSL and/or its subsidiaries and/or directors, employees or associates may have
interests or positions, financial or otherwise in the securities mentioned in this report.
Thank You
Contact:
Sameer Kamath
Chief Financial Officer
Motilal Oswal Financial Services Limited
Tel: 91-22-3982-5500 / 91-22-39825554
Fax: 91-22-2282-3499
Email: [email protected]
Sourajit Aiyer
Sr. Manager–Investor Relations
Motilal Oswal Financial Services Limited
Tel: 91-22-3982-5500 / 91-22-39825510
Fax: 91-22-2282-3499
Email: [email protected] /
Top Related