Motilal Oswal Financial Services Limited Q3 FY26 Earnings Call Summary

Summary

Motilal Oswal Financial Services Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026 4:00 PM

Event Participants

Executives 9 Ajay Menon, Ashish Shanker, Ajay Menon, Manish Kayal, Motilal Oswal, Navin Agarwal, Prateek Agrawal, Raamdeo Agarawal, Sanchit Suneja, Shalibhadra Shah, Sukesh Bhowal

Analysts 6 Aravind Ravichandran, Dev Shah, Dipanjan Ghosh, Lalit Deo, Mahek, Nidhesh

Financials & KPIs

Geographic & Segment Commentary

• Asset Management: AUM grew 33% YoY to ₹1.89 lakh crores with a net flow market share of 7.6%, significantly higher than the AUM market share of 2.7%. The segment saw aggressive hiring, doubling headcount to 620 in 21 months. Management highlighted that SIP flows crossed ₹4,500 crores (1.5x YoY) and 91% of active schemes are beating benchmarks.
• Private Wealth Management: Revenue reached ₹816 crores for 9MFY26 (+16% YoY) with a PAT of ₹280 crores. The segment is focused on RM productivity, noting that 60% of RMs currently have less than 3 years of vintage. Strategic focus remains on HNI/UHNI segments through captive and external wealth manager channels.
• Housing Finance: Solid operational recovery with AUM reaching ₹5,379 crores and disbursements showing 47% adjusted YoY growth. The sales force was expanded by 39% to 1,723 RMs. Management views this as a high-growth lever for the next 2-3 years without needing external capital.

Company-Specific & Strategic Commentary

• Annuity Mix Shift: The group is intentionally shifting from transactional to recurring revenue, with ARR now at 65% of net revenue. Broking’s share of Wealth Management revenue fell from 60% in FY21 to 37% in Q3FY26.
• Alternates Scaling: The Indian Business Excellence Fund (IBEF) V is nearing a final close at ~₹8,350 crores (nearly 2x the previous fund). Management introduced a new private credit fund in Jan 2026 to fill white spaces in the credit segment.
• New Carry Income Recognition: For the first time, the company recognized ₹58 crores in accrual (carry) income from two mature funds. This is expected to be a structural, recurring line item as more fund vintages enter their final 3 years of maturity.
• Capital Allocation: The “Treasury Investment” book generates ~18.5% IRR since inception, serving as a backbone for operating businesses. The company maintains a 20% dividend payout ratio of operating profits.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

AMC Flows and Performance

• Question: Why did net flow market share dip slightly QoQ? (Mahek, Emkay)
• Answer: Net sales share remains high at 7.6% (vs 2.7% AUM share). 91% of active AUM is beating benchmarks over 3 years, and 11 new fund managers have been added to diversify capabilities (Prateek Agrawal).

Carry Income Sustainability

• Question: How should we model the ₹58 crore carry income? (Lalit Deo, Equirus)
• Answer: This is just the beginning. Only 2 funds have crossed thresholds; as more vintages enter the last 3 years of maturity, this should be a recurring and growing line item (Navin Agarwal/Shalibhadra Shah).

Operating Expenses and Headcount

• Question: Why did opex and headcount decline sequentially? (Nidhesh, Investec)
• Answer: Costs are variable and aligned with lower transactional revenues this quarter. Headcount contraction was specific to the Wealth segment, while other growth businesses continue to hire (Shalibhadra Shah/Navin Agarwal).

Strategic Vision

• Question: How are you balancing growth and profitability amid volatility? (Sucrit Patil)
• Answer: We are positioning as a “talent powerhouse” with a strong balance sheet. While Broking faced regulatory headwinds, the non-broking annuity businesses grew to record highs (Raamdeo Agarawal).

Key Takeaway

Motilal Oswal Financial Services delivered a resilient Q3 FY26, characterized by a structural shift toward annuity-based income, which now constitutes 65% of net revenue. Operating PAT grew 16% YoY to ₹611 crores, despite muted broking revenues, driven by 32% growth in Asset and Private Wealth segments. The AMC business reached a milestone AUM of ₹1.89 lakh crores with 7.6% net flow market share, while the Alternates business began recognizing high-margin carry income (₹58 crores) which is expected to scale as fund vintages mature. Management is aggressively expanding into Private Credit and strengthening its RM base (410+ in PWM) to capture the financialization of Indian savings. With a strong net worth of ₹13,000 crores and an AA+ rating, the company is well-positioned to scale its lending book (NII) and maintain a 20%+ ROE. MOFSL remains a dominant integrated player poised to benefit from India’s projected market cap expansion.