Tag: Motilal Oswal Financial Services

Motilal Oswal shares rise 7% on multi-fold jump in Q4 profit; declares bonus shares

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Motilal Oswal Financial Services (MOFSL) climbed 7% to hit their 52-week high of ₹2,639 on the NSE on Friday after the domestic brokerage firm reported a whooping 334% year-on-year (YoY) jump in its March quarter consolidated net profit at ₹724.6 crore. The same was ₹167 crore in the year-ago period.

Motilal’s revenue from operations rose 108% YoY to ₹2,141.3 crore, compared to ₹1,027.4 crore.

EBITDA or Earnings Before Interest, Tax, Depreciation and Amortisation stood at ₹1,231.5 crore for the quarter from ₹443.7 crore recorded in the corresponding quarter of last year.

The company’s EBITDA margin stood at 57.5%, compared to 43.2% a year ago.

The board of Motilal Oswal also approved bonus shares in ratio of 3:1.

Record date for the bonus issue of shares is yet to be determined. This is the first ever issue of bonus shares that the company has considered.

In February 2024, Motilal had declared a dividend of ₹14 per share. Over the last five years, the company has paid dividends worth ₹56 per share to shareholders.

Post the bonus issue of shares, the company’s paid-up equity share capital will comprise of 59.6 crore equity shares of face value of ₹1. Motilal Oswal will capitalise ₹44.7 crore from the Securities Premium Account for implementing the bonus issue of shares.

As of March 31 2024, the company had an aggregate amount of ₹534.9 crore as an aggregate amount of its securities premium account.

At 3 pm, the scrip was trading 5.03% higher at ₹2,587.70 apiece on the NSE. The stock has given multibagger returns of 105% so far this year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal AMC appoints Prateek Agrawal as MD and CEO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Motilal Oswal Asset Management Company (MOAMC) Ltd on Wednesday (April 24) said it has appointed Prateek Agrawal as managing director (MD) and chief executive officer (CEO) of the company, effective from April 26, 2024, subject to necessary approvals.

Agrawal has close to 30 years of experience in the asset management business. He joined MOAMC in October 2022.

Also, Akhil Chaturvedi, currently Chief Business Officer of MOAMC, has been elevated to the position of executive director. Chaturvedi has been associated with MOAMC for over 11 years and has been leading the entire sales and operations functions.

Also Read: RIL’s pre-tax income beats revenues of over 50% Nifty companies

He has 25 years of experience in multiple functional roles, including sales, distribution, client advisory and business development across leading asset management companies.

Niket Shah, MF — Fund Manager of designated schemes of Motilal Oswal Mutual Fund, has been promoted to Chief Investment Officer. Shah has been associated with the Motilal Oswal Group for over 11 years.

He has more than 14 years of experience as a fund manager and research analyst, notably overseeing the Motilal Oswal Flexicap Fund and Motilal Oswal Midcap Fund with AUM exceeding ₹18,000 crore.

Motilal Oswal Asset Management Company is a material subsidiary of Motilal Oswal Financial Services Ltd. All of them will start in their new roles effective from April 26, 2024.

Also Read: PayU receives RBI’s in-principle approval to operate as a payment aggregator

Raamdeo Agrawal, Chairman of Motilal Oswal Asset Management Company, said, “This leadership transition not only recognises their efforts but also demonstrates our focused progression towards attaining market-leading positions across our businesses.”

Shares of Motilal Oswal Financial Services Ltd ended at ₹2,359.75, up by ₹47.75, or 2.07%, on the BSE.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gautam Duggad predicts consumption surge among low-income consumers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The declining inflation and election spending is likely to boost consumption among lower-income groups, according to Gautam Duggad, Head of Research for Institutional Equities at Motilal Oswal Financial Services.

Consumption, he noted, encompasses various sectors, some of which, like hotels and discretionary jewellery purchases, are performing exceptionally well.

However, items like groceries, home goods, and personal care products are not selling well.

For these things to sell better, a few things need to happen:

Normal Monsoon: It’s good news that this year’s monsoon is predicted to be normal.

Lower Inflation: Prices for things are starting to come down.

Also Read | Bankers and economists weigh in on RBI’s April monetary policy

Political Spending: There is hope that after the elections, maybe 6-7 months later, people will start buying more stuff.

“If I remember well, in the 2019 general election, the total political spending, as per various estimates, was about ₹60,000 crore. It is fair to say that this year it should be close to a lakh crore,” he said.

During April-December 2023, he said, Nifty earnings increased 16%. It is expected to have grown another 6% in the January-March 2024 quarter.

After accounting for some impact from commodities like metals and oil and gas, the growth rate for the portfolio under Motilal’s coverage is around 12%.

Similarly, for Nifty excluding commodities, the growth rate is approximately 9-10%, he stated.

Compared to the first nine months, the growth might seem a bit slower, but for the entire year, the estimated earnings per share (EPS) growth for Nifty is around 21%.

In the current financial year, he has penciled in an earnings growth of 14-15%, continuing the trend of double-digit earnings growth for the fifth consecutive year.

For the entire interview, watch the accompanying video

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal Fin shares snap two-day rally, drop over 3% on Sebi warning

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Motilal Oswal Financial Services Ltd dropped more than 3% on Wednesday, a day after the capital market regulator SEBI issued an administrative warning to the company asking it to be careful in the future for minor operational-related matters.

In a filing to the stock exchanges on Tuesday, Motilal Oswal Financial Services said that the warning letter was issued on April 8 in connection with the comprehensive inspection carried out of the stock broking activities of the company.

The Securities and Exchange Board of India (SEBI) conducts multiple inspections of our various regulated activities from time to time.

However, the financial services firm said that there is no impact on the financial, operation or other activities of the firm following the letter.

Additionally, the company announced that its board approved a proposal to raise up to ₹1,000 crore through non-convertible debentures (NCDs). This includes a base size aggregating up to ₹500 crore with an option to retain oversubscription up to ₹500 crore.

The company’s board meeting took place on April 9.

The stock opened at ₹2,099.85 apiece on the BSE on Wednesday, a slight increase of 0.2% from the previous close of ₹2,095.95. However, the stock could not maintain the positive momentum and declined as much as 3.52% to an intra-day low of ₹2,022. On Tuesday, the stock ended with an 11% gain.

With this, the company now commands a market capitalisation of over ₹30,900 crore.

Last month, domestic brokerage house Emkay Global initiated a ‘Buy’ rating on Motilal Oswal Financial Services citing its strong potential to capitalize on India’s expanding wealth.

Emkay suggested buying MOFSL shares with a target price of ₹2,000 each, indicating a potential increase of more than 26% from previous closing prices.

At 12.45 pm, shares Motilal Oswal Financial Services were trading 2.32% lower at ₹2,047.25 apiece on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal Financial Services gains 3% after Emkay sees 26% upside

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Domestic brokerage house Emkay Global has initiated a ‘Buy’ rating on Motilal Oswal Financial Services Ltd (MOFSL) as it believes that the company is well-positioned to benefit from India’s growing wealth.

Emkay recommends purchasing shares of MOFSL with a target price of ₹2,000 apiece, which implies a potential upside of over 26% from Wednesday’s closing levels.

Shares of Motilal Oswal Financial Services gained as much as 3.17% to a high of ₹1,630.4 apiece on BSE in morning trade on Thursday after positive outlook by Emkay Global.

In its research note, the brokerage said that MOFSL’s strength lies in its solid economic moats, especially in capital markets (broking and investment banking) and asset and wealth management sectors. These areas have proven resilient even during crises.

Additionally, MOFSL’s asset and wealth management businesses leverage its expertise in equity, which has reached critical mass and is expected to drive superior profitability growth, with an estimated operating profit after tax compound annual growth rate (CAGR) of 25% from fiscal year 2023 to 2026.

MOFSL’s net worth of approximately ₹83 billion is primarily invested in equity and mutual fund treasury assets, providing an additional safety margin to the valuation of its core operating businesses. This suggests that even if the core businesses face challenges, the substantial assets held by MOFSL could cushion any potential losses, the brokerage observed.

Shares of Motilal Oswal Financial Services Ltd were trading 2.14% higher at ₹1,614.15 apiece on the BSE at 10:20 am.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

What top market experts think of FM Sitharaman’s Budget 2024

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In an interaction with CNBC-TV18, market veterans Madhu Kela, Founder of MK Ventures, Ashok Wadhwa, Group CEO of Ambit, Prashant Khemka, Founder of White Oak Capital Management, Raamdeo Agrawal, Chairman and Co-founder of Motilal Oswal Financial Services, and Nilesh Shah, Managing Director of Kotak Mahindra AMC, shared their take on Budget 2024 presented by Finance Minister Nirmala Sitharaman on February 1.

According to Ashok Wadhwa, the two key takeaways are the fiscal path or borrowings, and continuing expenditure on infrastructure.

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Madhu Kela said there was nervousness in the market that the government may deviate from the fiscal path, “but not only have they adhered to it, but they have also given a clear direction for 2026 of adhering to 4.5% of the fiscal deficit. So, from the market perspective, this is the best possible outcome for this Budget.”

Kela remains optimistic on public sector banks, and has a positive outlook on overall capital expenditure, particularly focusing on the engineering, procurement, and construction (EPC) companies that remain relatively undiscovered by the market.

Also Read | PM Modi hails Budget 2024, says it guarantees of making India a developed nation by 2047

Raamdeo Agrawal highlighted that the government accelerated capital expenditure to stimulate economic recovery post-COVID. Now, with the economy finding its rhythm, there is a deliberate pause to let the private sector take the lead. He believes the trajectory will depend on the evolving interest rate scenario and the strength of the private sector response.

Prashant Khemka called the Budget as one of continuity, highlighting its most significant positive aspect – the fiscal deficit estimates of 5.1%. He dispelled concerns about a populist budget, emphasising that, for an interim budget, it stands out for its continuity, fiscal prudence, and a simultaneous increase in capital outlay.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Raamdeo Agrawal discusses Ayodhya tourism boost, and whether banks can derail market rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services shared his views with CNBC-TV18 on various subjects — from the tourism boost in Ayodhya following the inauguration of the new Ram temple, to the outlook on bank earnings and whether it has the potential to derail the market.

Agrawal highlighted the vast potential for economic growth in Ayodhya if it is strategically linked with major metro cities. He expressed optimism about the immense possibilities and potential economic benefits that such connectivity could bring to the region.

On January 22, as India celebrated the historic inauguration of the Ram Temple in Ayodhya, a recent report from Jefferies highlights the significant potential of the grand consecration ceremony to transform the location into a prominent global spiritual tourist destination, drawing an estimated 50 million visitors annually.

Speaking about the market and earnings outlook, Agrawal said there are some concerns on the banking sector where deposit growth, particularly accretion of low cost savings deposits, has slowed down. This, he said, is “because people are preferring coming to the capital markets and looking at stock market kind of options for an alternative deployment and that kind of reduces a mix of the deposits and raises the cost of the deposit. So, net interest margin (NIM) is under pressure.”

However, he also noted that the loan demand is strong and banks can grow at 20% there. He is not worried that this will derail the market but it could slow down the earnings growth in the banking, financial services, and insurance (BFSI) space.

Also Read | A $10 billion makeover of Ayodhya — How Ram Mandir will unlock India’s tourism potential

Agrawal also pointed out that while demand for capital goods seems to be healthy, consumer demand is still relatively weak. However, he is hopeful that the government will announce some measures in the Budget to boost demand.

Watch | Unprecedented rush of devotees in Ayodhya as Ram Mandir opens doors for public

For more details, watch the accompanying video

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal Financial increases weightage on real estate, expects lacklustre quarter for IT

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Motilal Oswal Financial Services has increased its weightage in the real estate sector to nearly 4% from 1%. “Although we hold a positive outlook (on the real estate sector), we are well aware that valuations are high, and companies must meet execution targets. Failing to deliver, considering the current valuations, can have significant repercussions,” said Gautam Duggad, Head of Research and Institutional Equities at Motilal Oswal Financial Services.

The brokerage firm anticipates a lacklustre performance in the IT sector for the third quarter of the financial year 2024. Duggad pointed out that there are more furloughs this time, and the commentary from IT companies has not been very comforting. So, the expectations are muted. “Statistically, this is the first quarter after 26 quarters where we are expecting a YoY decline in IT earnings,” added Duggad.

Also Read | Why this real estate company expects property prices to rise further

Duggad noted that the midcap IT space has witnessed better demand despite the overall subdued expectations for the industry.

Also Read | IT sector outlook: What experts anticipate in the third quarter of FY24

Duggad currently holds an equal-weight position on autos. However, he anticipates a clear positive shift towards two-wheelers in the near future.

For more details, watch the accompanying video

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Avenue Supermarts is the closest that comes to the Costco model: Ramdeo Agrawal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ramdeo Agrawal, co-founder and chairman of Motilal Oswal Financial Services, believes Avenue Supermarts comes closest to the Costco Model as a company. Avenue is the parent company of the popular retail chain DMart.

Costco’s model depends heavily on retaining shoppers who buy memberships and thus retain brand loyalty. Costco company boasts a membership renewal rate of 93% in the US and Canada and 90% worldwide. The model is named after a US multinational corporation that boasts over 800 warehouses and a “treasure hunt” shopping experience.

During a discussion, Agrawal spoke about learning the importance of return on equity and the franchise model from Charlie Munger. “We have to think through whether a business model can compound after 20-25 years today. That’s a big lesson I learnt from Munger,” he said.

Earlier, in an exclusive conversation with CNBC-TV18, he asked investors to forget the market cap obsession.

“The biggest small (cap) is about ₹18,000-20,000 crore and the smallest mid is ₹18,000-20,000 crore. So you have now enough size, so let us not discuss this SEBI classification for investing.”

As per him, a market is a bull run in full swing where the right idea trumps investment in indexes. “It’s all about snagging the right investment idea at a fair price. Whether it’s a big bank at an attractive price to earnings growth (PEG) or a smaller bank with even more allure, the art lies in the pick, not the size.”

Also Read:‘Small caps not so small anymore’, Raamdeo Agrawal on what good investors should focus on

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Brokerages bullish on FY24 earnings, but cautionary notes emerge for FY25

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerages have been quite happy with the second quarter of this financial year’s earnings with either a meet or beat on the Nifty earnings and so the Street believes that FY24 estimated earnings growth is well and truly on.

Nifty earnings

Motilal Oswal Financial Services has revised its Nifty earnings projections upwards by 1% for FY24 to ₹996. Nuvama Institutional Equities said the FY24E EPS growth estimated is largely unchanged at 15–16% against 10% in FY23 and this implies that the asking rate for H2FY24E is 8–10% vs 25% in H1FY24.

Also Read: Goldman Sachs raises Indian shares to ‘overweight’ on growth, earnings momentum

The short point is the Street believes that FY24E numbers may not be at risk but they caution that the 15% Earnings Per Share (EPS) growth forecast for FY25 seems optimistic as margin tailwinds would likely fade while demand headwinds still loom.

Brokerage verdict on Q2FY24 overall earnings

Jefferies review states that it has cut FY24 earnings estimates for 51% of 150 companies which is among the highest downgrade ratios in the past 7 quarters. Motilal Oswal Financial Services’ review of 239 companies under their coverage, 92 exceeded profit estimates while 66 posted a miss and 81 were in line.

Nuvama cautions on broader market earnings estimates

BSE500 companies’ top line slowed to 5% year-on-year but profit after tax (PAT) surged 25% year-on-year and this made the net profit margins move to 13% which is 400 bps above pre-COVID levels despite similar top-line growth. So, Nuvama Institutional Equities cautions that this may be an unsustainable dynamic.

Also Read: Paytm may see earnings risk as RBI tightens consumer lending norms

The reasons Nuvama Institutional Equities mentions are that the top-line slowdown is broadening from exporters, and end consumption to banks, and margin tailwinds are fading but high-end consumption and industrials remain strong though.

Now lower input prices boosted margins and reduced the working capital needs and this is what led operating cash flows in H1 of FY24 to spike 50% year-on-year. In the past quarter, superior margins drove small and midcap (SMID) earnings outperformance to large caps but remember that SMID earnings are more cyclical than large caps.

Consumption slowdown in the offing?

Consumption could potentially slow down as BSE500 private sector wage bill growth has moderated to 11% year-on-year which is close to a decadal low. Private sector wage bill growth is now in single digits for most sectors, barring. Given the fading margin tailwinds, wage bill growth could moderate further and potentially broaden the consumption slowdown.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow