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P a i n i n m a r k e t s ha r e f a l l c o n t i n u e s …
Motilal Oswal (MOSL) reported an average daily turnover (ADT) of | 3100
crore in Q4FY11, down from | 3600 crore in Q2FY11 and | 3400 crore in
Q3FY11. Q4FY11 market share has fallen to a low of 2%. The topline was
down 24% YoY and QoQ to | 126 crore, well below I-direct expectations.
EBIDTA margins were also under pressure and stood at 35%, down 730
bps QoQ. Going forward, we expect the company to maintain its market
share of 2.8-2.9% and PAT to register a tepid 7% CAGR over FY11-13E.
ƒ Broking yields under pressure- rise in options segment weighs
MOSL reported a further slide in blended yields, which dropped
from 5.5 bps in Q3 FY11 to 4.6 bps in Q4FY11. This was attributed to
a change in the volume mix. There was a shift towards the low yield
options segment that contributed ~65% of total volumes in Q4FY11,
compared to 57% in Q3FY11 and 44% in Q4FY10. This resulted in a
drop of overall market share from 2.3% in Q3FY11 to 2.0% in
Q4FY11 (since MOSL is considered to be a cash volume player
historically). Lower cash volumes in the market (10% in Q4FY11 vs.
14% in Q3 FY11) also impacted the blended yield of the company.
Total broking revenues of | 87 crore in Q4FY11, were down 28%
QoQ, 15% YoY and much lower than our estimates. We expect 2%
CAGR in broking revenues over FY11-13E to | 448 crore.
ƒ Other sources of revenues, subdued
The investment banking and asset management stream also
remained quite dull during the quarter. IB fees were down 77%
YoY, up 8% QoQ to | 5.4 crore. Fund based income was down 37%
QoQ to | 18 crore. We do not see any runaway growth from these
lines of businesses in the coming period.
V a l u a t i o n
Having a pure broking model, MOSL is finding it difficult to maintain its
market share in the current scenario. The rise in the options segment is
denting yields for all major players and MOSL is no exception. The fall in
cash volumes in total market turnover led to a fall in FY11 blended yields
to 5.1 bps. The pressure on topline growth in the past eight to 10 quarters
led to poor show on bottomline. Under such conditions, where topline
and bottomline growth looks moderate, we value the stock at 10x FY13E
(in line with other listed players) and arrive at a target price of | 110
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P a i n i n m a r k e t s ha r e f a l l c o n t i n u e s …
Motilal Oswal (MOSL) reported an average daily turnover (ADT) of | 3100
crore in Q4FY11, down from | 3600 crore in Q2FY11 and | 3400 crore in
Q3FY11. Q4FY11 market share has fallen to a low of 2%. The topline was
down 24% YoY and QoQ to | 126 crore, well below I-direct expectations.
EBIDTA margins were also under pressure and stood at 35%, down 730
bps QoQ. Going forward, we expect the company to maintain its market
share of 2.8-2.9% and PAT to register a tepid 7% CAGR over FY11-13E.
ƒ Broking yields under pressure- rise in options segment weighs
MOSL reported a further slide in blended yields, which dropped
from 5.5 bps in Q3 FY11 to 4.6 bps in Q4FY11. This was attributed to
a change in the volume mix. There was a shift towards the low yield
options segment that contributed ~65% of total volumes in Q4FY11,
compared to 57% in Q3FY11 and 44% in Q4FY10. This resulted in a
drop of overall market share from 2.3% in Q3FY11 to 2.0% in
Q4FY11 (since MOSL is considered to be a cash volume player
historically). Lower cash volumes in the market (10% in Q4FY11 vs.
14% in Q3 FY11) also impacted the blended yield of the company.
Total broking revenues of | 87 crore in Q4FY11, were down 28%
QoQ, 15% YoY and much lower than our estimates. We expect 2%
CAGR in broking revenues over FY11-13E to | 448 crore.
ƒ Other sources of revenues, subdued
The investment banking and asset management stream also
remained quite dull during the quarter. IB fees were down 77%
YoY, up 8% QoQ to | 5.4 crore. Fund based income was down 37%
QoQ to | 18 crore. We do not see any runaway growth from these
lines of businesses in the coming period.
V a l u a t i o n
Having a pure broking model, MOSL is finding it difficult to maintain its
market share in the current scenario. The rise in the options segment is
denting yields for all major players and MOSL is no exception. The fall in
cash volumes in total market turnover led to a fall in FY11 blended yields
to 5.1 bps. The pressure on topline growth in the past eight to 10 quarters
led to poor show on bottomline. Under such conditions, where topline
and bottomline growth looks moderate, we value the stock at 10x FY13E
(in line with other listed players) and arrive at a target price of | 110
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