Motilal Oswal Financial Services Ltd – FY2026 Consolidated Results Overview

Key Take‑aways

• Unqualified auditor’s opinion for FY2026.
• Net profit after tax: Rs 1,86,543 lakhs (‑26% YoY); EPS Rs 31.12 (down from Rs 41.83).
• Total revenue: Rs 9,41,642 lakhs, up from Rs 8,41,722 lakhs, mainly due to a one‑off commodities sale of Rs 1,40,809 lakhs.
• Operating margin fell to 23.9% (from 32.2%); net‑profit margin to 19.4% (from 25.96%).
• Debt‑Equity rose to 1.73x (vs 1.22x); Debt Service Coverage Ratio dropped to 0.18 (vs 0.28).
• Credit ratings reaffirmed (ICRA A1+, ICRA AA+, India Ratings A1+).
• Cash‑flow from operations turned negative (‑Rs 5.07 bn); cash balance fell to Rs 5.14 bn.

1. Financial Highlights

2. Segment Performance

• Wealth Management: Profit Rs 26,299 lakhs (up 8% YoY). Asset base grew to Rs 2,99,604 lakhs.
• Capital Markets: Profit Rs 9,812 lakhs, modest growth.
• Asset & Private Wealth Management: Profit Rs 43,059 lakhs, strong contribution.
• Home Finance: Profit Rs 8,036 lakhs, driven by higher loan book.
• Treasury Investments: Loss Rs 1,05,036 lakhs, the biggest drag on earnings.

3. Balance Sheet & Liquidity

• Assets surged mainly due to higher loans (Rs 13,74,434 lakhs) and investments (Rs 10,29,918 lakhs).
• Liabilities rose sharply, especially debt securities (Rs 15,47,888 lakhs) and other borrowings (Rs 5,77,623 lakhs).
• Cash‑flow: Operating activities generated a negative Rs 5.07 bn; financing activities provided a positive Rs 6.15 bn mainly from new debt issuance.
• Liquidity ratios: Current ratio slipped to 1.13; cash position weakened.

4. Credit Ratings & Funding

• ICRA reaffirmed A1+ for commercial paper and AA+ (stable) for NCDs.
• India Ratings affirmed A1+ (CP) and AA+/Positive (NCDs, bank facilities).
• No change from CRISIL.
• Debt raised in FY2026: Rs 4.17 bn (short‑term) + Rs 84 bn (long‑term) indicating reliance on market funding.

5. Governance & Regulatory Items

• Employee Stock Options: 7,28,878 shares allotted in the quarter; 25,46,244 shares for FY2026 – modest dilution.
• Labour Code Impact: Additional gratuity provision of Rs 999.71 lakhs (FY) and Rs 1,440 lakhs (quarter) recognized, increasing employee benefit expense.
• Security Cover: NCDs fully secured with asset cover of ≥1.2x as per regulatory requirement.

6. Risks & Opportunities

Risks

• Deteriorating profitability and shrinking margins.
• Elevated leverage and weakening debt‑service coverage.
• Large loss in Treasury Investments may recur if market volatility persists.
• Negative operating cash flow could pressure liquidity if financing conditions tighten.

Opportunities

• Wealth Management and Home Finance segments show resilient growth.
• Asset base expansion provides scope for higher fee‑based income.
• Stable credit ratings keep access to cheap funding.
• Potential recovery in Treasury Investments as market conditions improve.

7. Outlook

Given the profit decline, higher leverage, and negative operating cash flow, the near‑term outlook is moderately negative. However, the firm’s diversified business lines, strong asset base, and reaffirmed credit ratings provide a foundation for a turnaround if margins improve and Treasury losses are contained.

Prepared for investors on 29 Apr 2026.