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Motilal Oswal:: Dull performance…
Motilal Oswal (MOFSL) reported PAT at | 42 crore in Q3FY11 against | 33
crore in Q2FY11. However, adjusted PAT after unrealised gains remained
flat for both quarters at around | 38 crore, which was in line with our
estimates. Broking and fund based income boosted the topline, which
grew 5% QoQ and 4% YoY to | 165.3 crore. We expect total income to
grow at 4% CAGR over FY10-12E to | 704 crore.
Yields rise, market slides
MOFSL saw sharp erosion in market share on a sequential basis to 2.3%
from 3% mainly on account of rising options volumes (which were 57% of
total market ADT in Q3FY11 vs. 53% in Q2FY11). ADT now stands at | 3400
crore. The cash segment share was maintained. However, they managed to
increase blended yields that rose to 5.5 bps from 4.8 bps during the same
period. This has led to broking income rising 3% QoQ and 10% YoY to | 133
crore. With volumes expected to stabilise here on account of volatile market
conditions, we expect FY11E ADT to be at | 126270 crore. Hence, total
broking income would also remain flat YoY.
Financing income boosts bottomline
Financing income rose sequentially to | 27.6 crore, up from | 14.4 crore on a
loan book of | 270 crore. Asset management fees were | 10 crore for
Q3FY11 on group AUM of | 2300 crore and contributed 7% of total
revenues. Investment banking income dipped 70% both QoQ and YoY. After
Q2 that saw lower EBIDTA margins, Q3FY11 saw higher margins at 42%, up
700 bps QoQ. We believe bottomline will stay around | 170 crore in FY12E
and | 157 crore in FY11E as no major triggers are seen in the broking sector.
Valuation
MOFSL has a decent operating model with 1568 outlets and is mostly
franchise based. In times of lower growth in ADT from the current scenario,
we expect the company to give steady profits. We have lowered our FY11E
and FY12E PAT by 2% and 6%, respectively. We still value the stock at 11x
FY12E EPS and have arrived at a fair value of | 127 with an ADD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Motilal Oswal:: Dull performance…
Motilal Oswal (MOFSL) reported PAT at | 42 crore in Q3FY11 against | 33
crore in Q2FY11. However, adjusted PAT after unrealised gains remained
flat for both quarters at around | 38 crore, which was in line with our
estimates. Broking and fund based income boosted the topline, which
grew 5% QoQ and 4% YoY to | 165.3 crore. We expect total income to
grow at 4% CAGR over FY10-12E to | 704 crore.
Yields rise, market slides
MOFSL saw sharp erosion in market share on a sequential basis to 2.3%
from 3% mainly on account of rising options volumes (which were 57% of
total market ADT in Q3FY11 vs. 53% in Q2FY11). ADT now stands at | 3400
crore. The cash segment share was maintained. However, they managed to
increase blended yields that rose to 5.5 bps from 4.8 bps during the same
period. This has led to broking income rising 3% QoQ and 10% YoY to | 133
crore. With volumes expected to stabilise here on account of volatile market
conditions, we expect FY11E ADT to be at | 126270 crore. Hence, total
broking income would also remain flat YoY.
Financing income boosts bottomline
Financing income rose sequentially to | 27.6 crore, up from | 14.4 crore on a
loan book of | 270 crore. Asset management fees were | 10 crore for
Q3FY11 on group AUM of | 2300 crore and contributed 7% of total
revenues. Investment banking income dipped 70% both QoQ and YoY. After
Q2 that saw lower EBIDTA margins, Q3FY11 saw higher margins at 42%, up
700 bps QoQ. We believe bottomline will stay around | 170 crore in FY12E
and | 157 crore in FY11E as no major triggers are seen in the broking sector.
Valuation
MOFSL has a decent operating model with 1568 outlets and is mostly
franchise based. In times of lower growth in ADT from the current scenario,
we expect the company to give steady profits. We have lowered our FY11E
and FY12E PAT by 2% and 6%, respectively. We still value the stock at 11x
FY12E EPS and have arrived at a fair value of | 127 with an ADD rating.
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