Dear Shareholders,
Indian economy proved to be remarkably resilient in FY2023 with GDP growth of 7.2% and
continues to remain one of the fastest growing economy due to the strong macroeconomic
fundamentals. Global economy faced uncertainty due to geopolitical tensions and continued
lockdown in China. This led to significant disruption in global supply chain and
consequently high inflation across the world. Several central banks including RBI were
quick to react to this alarming situation and hiked interest rates to curb inflation. The
proactive steps taken by RBI effectively curbed inflationary pressure and paved the way
for a more stable economic environment.
At MOFSL, we reported highest ever operating revenue of ? 4,319 crore in FY2023,
registering a growth of 8% YoY. Our operating PAT touched an all-time high of ? 879 crore.
Our consolidated ROE stood at 18%. Our focus on knowledge, talent, processes, technology,
brand & culture and inter-segment synergies have helped us to withstand market
headwinds and achieve key milestones across all business verticals. We continue to remain
optimistic on the growth potential of all our business verticals given the robust
fundamental structure.
On the capital markets front, Indian equity markets ended on a flattish note. Number of
new entrants into the stock market declined as industry witnessed 2.5 crore new demat
account being opened in FY2023 as compared to 3.5 crore in previous financial year. While
FIIs were on a selling spree for second consecutive year, DIIs offset the pressure and
recorded highest ever inflows. On the back of our strengths- "Phygital Business
model" and "Research and Advisory", our broking business recorded highest
ever broking revenues, profits and Average Daily Turnover (ADTO) in FY2023. We added 6.5
lakh clients in FY2023, taking the total retail client base to ~35 lakh. We had one of the
highest Average Revenue Per User (ARPUs) in the industry. Our derivative market share was
at multi period high in FY2023. Our distribution AUM stood at ? 21,300 crore and has huge
head-room for growth. During the year, we launched Options Store and Research 360-degree
App, further strengthening our offerings. In Institution business, our rankings and
clientele continued to remain robust. We were awarded #1 Corporate Access Team in Asia
Money Brokers Poll 2022. We completed the largest private equity deal for our Investment
Banking business in FY2023 and we continue to engage on a wide cross-section of mandated
transactions across capital markets and advisory.
Our AMC AUM which includes MF, PMS and AIF stood at ? 45,620 crore. During the year, we
onboarded Prateek Agrawal, an industry veteran, to lead business and investment strategy.
We strengthened our Risk Management framework and revamped investment process to deliver
consistent returns. All these measures led to turnaround in performance of our active MF
schemes, which in turn led to improvement in gross sales and decline in redemptions. We
have a diverse passive product basket spread across various categories including
international ETFs and index funds. Fee earning PE and RE AUM stood at ? 10,280 crore. We
launched IBEF IV, the biggest PE fund, in FY2022. The fund witnessed overwhelming response
and we were able to attain final close at ? 4,500 crore within a year. Our wealth
management business AUM recorded a growth of 51% YoY at ? 52,000 crore. Our net sales was
at an all-time high of ? 5,800 crore in FY2023. We have bolstered our leadership team with
senior management hiring to strengthen Ultra HNI offerings and advisory capabilities.
Keeping in mind our growth aspirations, we on boarded 63 RMs during the financial year,
taking the total count to 182. We will continue to invest in this business by adding RMs.
With improvement in the vintage of RMs, the profitability of our wealth management is
poised for further traction.
On our housing finance business, FY2023 was a landmark year where we reported highest
ever PAT of ? 136 crore, with a 44% YoY growth. Disbursements crossed ? 1,000 crore
milestone, registering a growth of 57% YoY. During the year, ICRA upgraded rating to
AA/Stable from AA-/Stable. We have joined hands with U.S. International Development
Finance Corporation (DFC) in FY2022 and received a commitment of USD 50 mn, of which we
have received USD 30 mn till March 2023. Apart from that, we continued to have strong
Liability Mobilizations from various Banks & Institutions at competitive rates. Our
cost of borrowings for FY2023 stood at 8.0%, down by 24 bps YoY. Further, we have expanded
our sales force with 690+ sales employees currently in place and we are present in 109
locations across 12 states/UTs. Our collection efficiency remained robust at 100.1% in
FY2023. We have strengthened legal unit to pursue legal actions aggressively such as
SARFAESI, section 138 and arbitration cases. As of March 2023, our GNPA stood at 1.1% and
NNPA at 0.5%.
In our fund based businesses, our total investments including alternate investments
stood at ? 4,280 crore with a since inception IRR of 16%. Our QGLP philosophy, niche
expertise in equities, proven track record and belief in 'skin in the game', augurs well
for our fund based business.
Despite of various market headwinds, we have continued to delivered sustainable
performance. Our retail broking business continued to consolidate its market position
during FY2023 by adding franchisees and improving its market share through digital
initiatives and benefitting from market expansion and industry consolidation. We continue
to focus on our strategy to diversify our businesses towards linear sources of earnings.
Our Asset Management business has seen improvement in performance and is likely to gain
from process driven investing and its niche offerings. Our Wealth Management business is
on its way to achieve scale as we have strengthened our leadership team and continued
investments in Relationship Managers. Our Alternates business continue to deliver robust
returns across Private Equity and Real Estate Funds. Our Housing finance business has
witnessed turnaround by improving disbursements and profitability parameters and is now
geared up for sustainable growth. There is immense potential and opportunities in the
market for each of our businesses to flourish.
I am proud to say that our team displayed unwavering dedication and determination. We
adapted swiftly to the changing circumstances, embracing new technologies and strategies
to overcome the obstacles. Our employees showed immense resilience, working diligently to
maintain productivity and deliver exceptional results.
FY2023 was undoubtedly a challenging year. However, it also served as a catalyst for
growth and transformation. By leveraging the experiences gained and building on our
strengths, we can emerge stronger, more resilient, and better equipped to face the
uncertainties of the future.
I sincerely thank all the employees for their steadfast dedication towards the Company.
I also want to express my gratitude to all the stakeholders who have shown support and
rendered well-wishes for the Company.
With best wishes,
Motilal Oswal
Managing Director & Chief Executive Officer Motilal Oswal Financial Services
Limited