Motilal Oswal stock jumps 7%; market cap nears Rs 50,000 crore mark

Thus far in the current calendar year 2024, the stock has zoomed 165 per cent, as compared to 15 per cent rise in the BSE Sensex, data shows.

Motilal Oswal Financial Services share price today: Shares of Motilal Oswal Financial Services (MOFSL) rallied 7 per cent on the BSE in Wednesday’s intra-day trade in otherwise a subdued market on positive business outlook. The stock of stock broking & allied services company hit a record high of Rs 819.95 on Wednesday, and surpassed its previous high of Rs 807.20 touched on September 6, 2024. 

In the past two months, the market price of Motilal Oswal Financial Services stock has zoomed 51 per cent. Thus far in the current calendar year 2024, the stock has skyrocketed 165 per cent, as compared to 15 per cent rise in the BSE Sensex.

 

A sharp rally in the stock price of the company has seen the market capitalisation (market-cap) of Motilal Oswal Financial Services inches towards the Rs 50,000 crore mark. The company’s market cap touched Rs 49,066 crore in intra-day trade today.

Motilal Oswal Financial Services credit rating

In exchange filing, Motilal Oswal Financial Services has informed that India Ratings and Research Private Limited (India Ratings) has revised its credit rating outlook from "Stable" to "Positive" for debt instrument(s) its material subsidiaries. Earlier this month, CRISIL Ratings revised its outlook on the non-convertible debentures of MOFSL to ‘Positive’ from ‘Stable’.

"The Positive Outlook factors in the likelihood of a scale-up of the overall group revenue and profit pools across different segments, and the presence of seasoned management, sizeable investment book, market share gains across businesses, strong revenue per customer in the broking business compared to peers along with sizeable lending businesses across capital markets and the housing subsidiary," India Ratings said.

The rating action reflects MOFSL’s established franchise with the ability to offer a wider range of product and services across wealth management, private wealth, asset management, private equity & real estate funds across customer profiles, along with consistent and predictable cash flow generation from its broking, lending business on both housing and capital market linked and asset & private wealth management businesses. 

With a total client base of around 7.3 million at end-1QFY25, the group caters to both retail and institutional clients through over 2,500 business locations, taking the pan-India pin code coverage to 98.0 per cent.

Motilal Oswal Financial Services business

As on June 2024, about 89 per cent of Motilal Oswal Financial Services Group customers had only single product relationship, indicating potential cross-sale opportunity over the long term with expected financialisation of savings. The Securities and Exchange Board of India (Sebi) also defines MOFSL as a QSB (qualified stock brokers) in India, by virtue of their size and scale of operations, and its impact on investors and securities market.

"With an increasing retail participation in the past three years across discount brokerages, there could be a gradual migration of clients towards full-service providers, benefitting the MOFSL Group due to evolving regulations for discount brokers. Given volatility in the financial market business, such as private wealth, asset management and wealth management, its volume could see certain moderation. However, the benefit of a widening of participation in the equity markets would stand to accrue on a recurring basis and operating leverage benefits of an established franchise would continue to play out for Motilal Oswal Financial Services," India Ratings said in rationale.

CRISIL Ratings, on the other hand, said the revision in outlook is driven by the expectation of sustained improvement in the business risk profile of the group – evidenced by sustained growth and diversity in business segments, underpinned by the group’s established position in the broking segment and expanding presence in adjacent businesses such as wealth and asset management.

The outlook also factors in the anticipated continuity of increase in operating profits, corresponding to the business growth, while risk management and capitalisation metrics remain sound, the rating agency said.

Overall turnover of the business witnessed a healthy growth of 120 per cent for fiscal 2024, primarily in the derivatives segment. This has supplemented the growth in core broking revenue by 34 per cent during the year. In terms of market share for fiscal 2024, MOFSL held 8 per cent (volumes traded in retail, institutional and proprietary segments) in the cash segment whereas in the future & option (F&O) segment – market share was 3.1 per cent. Overall market share was 3.1 per cent for the fiscal 2024. Over the medium term, the group is expected to maintain its strong footing in the equity broking segment – which would continue to bolster its growth in adjacent segments like asset and wealth management, CRISIL Ratings said.