Q3 FY11 results of Motilal Oswal

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Motilal Oswal reports a topline of `165.3 Crores

and PAT of `42.1 Crores for Q3 FY11

Mumbai, Jan 28, 2011: Motilal Oswal Financial Services (MOFSL), a leading financial services company, announced its results for quarter ended December 31, 2010 post approval by the Board of Directorsat a meeting held in Mumbai on January 28, 2011.

Performance Highlights

`Crores	Q3 FY11	Comparison (Q2 FY11)	Comparison (Q3 FY10)
Total Revenues	165.3	↑   5%	↑ 4%
EBIDTA	69.3	↑ 25%	↑ 8%
PAT (before E& EOI^)	42.1	↑ 27%	↑ 13%
EPS- `(FV Re 1)	2.9

^  E & EOI = Exceptional items & Extraordinary items

Performance for the Quarter ended December 31, 2010

·      Revenues for the quarter at `165.3 crores, up 5% as compared to Q2 FY11 and up 4% as compared to Q3 FY10.

·      Reported PAT for Q3 FY11 at `42.1 crores, up 27% compared to Q2 FY11 and up 13% compared to Q3 FY10.

To facilitate better comparison of operational performance for Q3 FY11, the following items needs to be considered:

`Crores		Q3 FY11	Q2 FY11	Q3 FY10
PAT (before E& EOI) – Reported		42.1	33.1	37.1
Less :	Unrealised gain of previous quarter booked in this quarter (post tax)	4.7	1.4	3.1
Add :	Unrealised gain in arbitrage (post tax)	0.2	4.7	0.8
Add :	Expenses incurred on launch of M-50 (post tax)	-	3.0	-
Less:	Profit on sale of investments/Fixed assets and change in accounting policy for arbitrage	-	1.3	-
Adjusted PAT		37.6	38.1	34.9

Adjusted PAT for Q3 FY11 at `37.6 crores is down 1% compared to Q2 FY11 and up 8% compared to Q3 FY10.

·      Strong balance sheet with net-worth of `1063.4 crores and net cash of `245.6 crores as on December 31, 2010.

Speaking on the performance of the company, Mr. Motilal Oswal, CMD said.

“After reaching new peaks in the first half of the quarter, markets have corrected sharply in the second half due to concerns of high inflation, interest rate, commodity prices and the US recovery pace affecting global allocations of FIIs. This has impacted market sentiments adversely resulting in a slowdown in market activity. Nevertheless, with corporate earnings showing good growth and companies in expansion and acquisition mode, the Indian growth outlook is fundamentally strong and will provide good investment opportunities from a medium to long term perspective. We continue to invest into all of our businesses and we believe that we would be able to benefit from the emerging opportunities in the financial services space. Our endeavor to provide high quality services were recognized at the CNBC TV18 Financial Advisor Awards 2010 where we won the Best Performing Equity Broker (National) Award. Also, the recent launch of our M100 ETF, India’s first mid cap focused ETF, is testimony to our strategy to continuously bring innovative market access products to the investors.”

Segment results

·      Broking and related revenues were `121.4 crores, up 7% compared to Q2 FY11 and up 10% compared to Q3 FY10.

·      Fund based income was `27.6 crores, up 93% as compared to Q2 FY11 and up 49% compared to Q3 FY10. This includes the unrealized gain of `7 crores (pre tax). Post these adjustments fund based income in Q3 FY11 at `20.9 crores was up 8% over Q2 FY11 and up 37% over Q3 FY10.

·      Asset Management fees were `10.8 crores, up 3% compared to Q2 FY11 and up 10% compared to Q3 FY10.   

·      Investment banking fees were `5 crores, down 70% compared to Q2 FY11 and down 71% compared to Q3 FY10. The drop in this quarter’s revenue is attributable to revenue booking on few deals in advanced stages of execution getting postponed to subsequent quarters. The deal pipeline remains robust and we continue to remain optimistic about the growth prospects in FY11.

·      Other income was `0.5 crores, down 84% compared to Q2 FY11 and down 77% compared to Q3 FY10.

Business highlights for Q3 FY 2011

·      Retail Broking and Distribution business increased its customer base to 693,978 in December 2010 and distribution expanded to 1,568 outlets across 595 cities.

·      Total Assets under Management for the Group were ~`2300 crores, which includes assets under portfolio management, mutual fund and also assets under advice in private equity business.

·      M50 ETF, India’s first fundamentally weighted ETF based on Nifty, has seen active investor interest and is the 3rd most traded Equity ETF listed in India. As of December 2010, with an AUM of `280 crores, it is ranked 2nd in terms of AUM amongst Equity ETFs listed in India.

·      Wealth Management business - “Purple Client Group” managed assets of ~`1200 crores.

·      Motilal Oswal Securities Ltd. (MOSL) was adjudged as the Best Performing Equity Broker (National) at the CNBC TV18 Financial Advisors Awards – 2010.

·      MOAMC launched its second fund - MOSt Shares Midcap 100 ETF on 10th January, 2010. This is India's First Midcap ETF and is based on the CNX Midcap Index.

·      15th Wealth Creation Study was released with a theme of ‘Unknown and Unknowable Investing’ (UU Investing) on 15th December, 2010 at BSE.

·      MOSL launched a new web service called “My Motilal Oswal” using a unique widget-based framework that allows users choose what information they want to see, where they want to see and how they want to see.

·      MOAMC has also filed a draft scheme information document with SEBI for another fund - Motilal Oswal Most Shares NASDAQ – 100 ETF (Most Shares N100).