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S l o w q u a r t e r , o n e - t i m e i n c o m e b o o s t s P A T …
Motilal Oswal (MOSL) reported a dip of 37% YoY and 2% sequentially in
recurring profit at | 26 crore. Exceptional income of | 13 crore from sale
of office premises added to overall profits to | 35 crore. Average daily
turnover (ADT) rose slightly to | 2760 crore for Q2FY12 from | 2430 crore
sequentially. Total revenue remained stable QoQ at | 114 crore, a dip of
28% YoY. We expect PAT of | 121.9 crore in FY13E for MOSL.
Currently, brokerages are unable to maintain yields due to increased F&O
volumes. IB and AUM based services are expected to remain subdued as
the market environment is unfavourable. Hence, we believe the
underperformance of the sector will continue. We are, therefore,
dropping coverage on the stock and sector.
ƒ No respite in yields, market share increases marginally…
The market share increased to 1.9% from 1.8% after a considerably
long period. The management maintains that market share in cash
segment remains stable. However, blended yields again dipped to
4.6 bps from 5 bps in Q1FY12. Broking revenues remained stable at
| 80 crore, down 29% YoY. EBIDTA margins, however, improved to
35% from 31% sequentially. We believe higher pressure on yields
and even market volumes may persist for the next few quarters.
ƒ Investment banking lacklustre, fund based income stagnant…
Fund based income at | 19.8 crore remained the second largest
contributor to the topline. The margin funding book declined
marginally to | 300 crore from | 330 crore in Q1FY12. The
investment banking income remained negligible. The asset
management stream earned | 10 crore, on total AUM of | 2260
crore. With unfavourable market conditions, a pick-up in income
from these segments seems difficult.
V a l u a t i o n
MOFSL has been able to maintain EBIDTA margins on account of
franchisee based model (1538). However, topline and bottomline have
suffered substantially in line with markets. We believe despite cheap
valuations, one should avoid entering stock due to no near term triggers
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S l o w q u a r t e r , o n e - t i m e i n c o m e b o o s t s P A T …
Motilal Oswal (MOSL) reported a dip of 37% YoY and 2% sequentially in
recurring profit at | 26 crore. Exceptional income of | 13 crore from sale
of office premises added to overall profits to | 35 crore. Average daily
turnover (ADT) rose slightly to | 2760 crore for Q2FY12 from | 2430 crore
sequentially. Total revenue remained stable QoQ at | 114 crore, a dip of
28% YoY. We expect PAT of | 121.9 crore in FY13E for MOSL.
Currently, brokerages are unable to maintain yields due to increased F&O
volumes. IB and AUM based services are expected to remain subdued as
the market environment is unfavourable. Hence, we believe the
underperformance of the sector will continue. We are, therefore,
dropping coverage on the stock and sector.
ƒ No respite in yields, market share increases marginally…
The market share increased to 1.9% from 1.8% after a considerably
long period. The management maintains that market share in cash
segment remains stable. However, blended yields again dipped to
4.6 bps from 5 bps in Q1FY12. Broking revenues remained stable at
| 80 crore, down 29% YoY. EBIDTA margins, however, improved to
35% from 31% sequentially. We believe higher pressure on yields
and even market volumes may persist for the next few quarters.
ƒ Investment banking lacklustre, fund based income stagnant…
Fund based income at | 19.8 crore remained the second largest
contributor to the topline. The margin funding book declined
marginally to | 300 crore from | 330 crore in Q1FY12. The
investment banking income remained negligible. The asset
management stream earned | 10 crore, on total AUM of | 2260
crore. With unfavourable market conditions, a pick-up in income
from these segments seems difficult.
V a l u a t i o n
MOFSL has been able to maintain EBIDTA margins on account of
franchisee based model (1538). However, topline and bottomline have
suffered substantially in line with markets. We believe despite cheap
valuations, one should avoid entering stock due to no near term triggers
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