Mehabe score: 6 G Factor: 3 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 8.
Description
Motilal Oswal Financial Services Ltd. was founded in 1987 as a small sub-broking unit, with just 2 people running the show. Today we are a well-diversified financial services firm.
The company has a network spread over 550 cities and towns comprising 2500+ Business Locations operated by our Business Partners and us and 16,00,000+ customers.
Main Points
3% Market Share in Capital Market
Market share of Capital Markets improved by 80bps YoY to 3.1%. #
Stable market share of 1.9% in MF Equity AUM. #
Asset Under Management
Broking- 11100 Cr
AMC- 38600 Cr
Wealth Management- 20000 Cr
Private Equity and Real Estate- 6500 CrSite:MOTILALOFSMain Symbol:MOTILALOFS
Stock trades at 1099.0, above its 50dma 833.09. It also trades above its 200dma 707.98. The stock remains bullish on techicals
The 52 week high is at 1179.40 and the 52week low is at 538.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has delivered good profit growth of 50.77% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 28.74%
-Debtor days have improved from 144.58 to 92.27 days.
Weakness
– Stock is trading at 3.64 times its book value
Competition
– The industry trades at a mean P/E of 26.0x. SBI Cards trades at the industry’s max P/E of 92.97x. MOTILALOFS trades at a P/E of 12.2x
– Industry’s mean G-Factor is 4.2 while the mean Piotski score is 8.0. MOTILALOFS has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 6.3%. The max 1- month return was given by Motil.Oswal.Fin.: a return of 37.42 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 1141.0 cr compared to Rs 611.0 cr for period ended Mar 2020, a rise of 86.7%
Company reported operating profit of Rs 665.0 cr for period ended Mar 2021, operating profit margin at 58.3 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 30.56 compared to Rs 22.78 for previous quarter ended Dec 2020 and Rs -17.14 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3626.0 cr for period ended Mar 2021 vis-vis sales of Rs 2358.0 cr for the period ended Mar 2020, a healthy growth of 35.0%. The 3 year sales cagr stood at 9.6%.
Operating margins expanded to 56.0% for period ended Mar 2021 vis-vis 34.0% for period ended Mar 2020, expansion of 2200.0 bps.
Net Profit reported at Rs 1245.0 cr for period ended Mar 2021 vis-vis sales of Rs 183.0 cr for the period ended Mar 2020, rising 85.3%.
Company recorded a healthy Net Profit CAGR of 26.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 35.0% compared to 18.0% over the last 3 Years. – The stock has given a return of 64% on a 1 Year basis vis-vis a return of 12% over the last 3 Years. – The compounded sales growth on a TTM bassis is 54% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 620% vis-vis a compounded profit growth of 28% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 9.44% vis-vis 9.42% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 15.39% vis-vis 15.69% for Dec 2020
Conclusion
– is expected to give good quarter
– has delivered good profit growth of 50.77% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 28.74%
-Debtor days have improved from 144.58 to 92.27 days. – Stock is trading at 3.64 times its book value
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 833.09 and is trading at 1099.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
