Motilal Oswal Financial Services Limited — Q4 FY26

Motilal Oswal Financial Services Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=pPGu9WU3vrk Published: 13 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Motilal Oswal Financial Services Limited Q4 FI26 earnings 0:09 9 seconds conference call. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions 0:16 16 seconds after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on 0:24 24 seconds your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Kayal. Thank you and over to you sir. 0:35 35 seconds Thank you Michelle. Good afternoon everyone. I welcome all the participants on behalf of Motila Losal Financial Services Limited to take time out to 0:43 43 seconds attend our Q4 and full year FI26 earnings conference call. We hope that you had an opportunity to go through our 0:50 50 seconds investor deck and press release uploaded on the stock exchange and on our website yesterday. We have also uploaded the 0:58 58 seconds Excel data book which has all the operational and financial numbers. 1:02 1 minute, 2 seconds Please note that today's discussion may include some forward-looking statements. 1:06 1 minute, 6 seconds These forward-looking statements are based on our macro assessment and actual outcome may vary. We have the entire senior leadership um management on the 1:15 1 minute, 15 seconds call. We will start this call with an opening remark by Naven and we'll then have a Q&A session. Over to you Naven. 1:22 1 minute, 22 seconds Thank you. 1:25 1 minute, 25 seconds Thank you Manish. Uh and good afternoon everyone. Uh a warm welcome to all of you to our earnings call for the quarter 1:31 1 minute, 31 seconds and the year ended uh March 2026. Uh uh starting with a you know broad backdrop 1:40 1 minute, 40 seconds uh Motraal Financial Services the largest integrated capital markets player with strong and rising rankings 1:46 1 minute, 46 seconds across businesses uh a rising share of annuity revenues and with each business still offering a strong growth runway. 1:55 1 minute, 55 seconds Since our listing back in 2007, we've never uh diluted our equity while consistently paying out dividends and 2:03 2 minutes, 3 seconds executing three buybacks. This has only been possible due to our unique twin engine business model wherein our large investment book serves as a strong 2:11 2 minutes, 11 seconds backbone to all the operating businesses which have seen rising needs of capital over the years due to changing 2:19 2 minutes, 19 seconds regulations or uh strong growth in terms of the scale of the businesses. Our operating businesses have delivered a uh 2:27 2 minutes, 27 seconds 10-year compounded operating profit after tax growth of 33% peranom uh EPS 2:34 2 minutes, 34 seconds growth of 28% peranom return on equity of 23%. 2:39 2 minutes, 39 seconds Uh this strong growth is supported by our investment book which grew by 40% compounded since inception led by a 2:45 2 minutes, 45 seconds combination of strong IRRs as well as reinvestment of the operating profits post distributions. Our annuity 2:53 2 minutes, 53 seconds businesses now contribute over 60% of the revenues have risen in the last five and 10 years and our view will continue 3:01 3 minutes, 1 second to rise uh going forward resulting in improved quality as well as predictability of our cash flows. 3:09 3 minutes, 9 seconds This growth is powered by a future ready tech infrastructure. We have embedded AI in every facet of business processes, 3:18 3 minutes, 18 seconds improving internal productivity, strengthening execution, and creating a long-term strategic differentiation. 3:26 3 minutes, 26 seconds We are now ranked among the top 150 companies uh based on the 2025 calendar year pack and among top 200 companies by market cap. 3:38 3 minutes, 38 seconds We see the next decade offering equally exciting prospects uh which should drive further improvement in these rankings. 3:47 3 minutes, 47 seconds context the capital markets index is a rising part of n 500 index and it share the capital markets index share in the n 3:56 3 minutes, 56 seconds 500 has grown from mere.13% 10 years ago to84% 5 years ago and now stands at over 2 and 4:05 4 minutes, 5 seconds a half%. The number of companies in the capital market segment increased from just three 10 years ago to 10 companies 5 years ago and now at 18 companies. 4:17 4 minutes, 17 seconds Mulas for financial services has generated alpha for all its shareholders by delivering a 10-year return of 26% versus 17% for nift and 12% for n 500. 4:30 4 minutes, 30 seconds strong growth in India's total wealth uh from just over 10 trillion dollars now to over a hundred trillion dollars in 4:37 4 minutes, 37 seconds the uh centennial year of India a financialization of these uh large wealth pool or savings and continued 4:46 4 minutes, 46 seconds industry consolidation augur well uh for MOFSL in the decade that is ahead 4:54 4 minutes, 54 seconds turning to FI26 performance our FI26 continues to witness strength in most of the businesses growth has been I repeat 5:01 5 minutes, 1 second led by annuality businesses mainly asset management and private wealth our operating profit after tax in the year 5:09 5 minutes, 9 seconds FI 206 grew by 16% value to 2360 crores led by a 33% growth in the profits of 5:18 5 minutes, 18 seconds asset and private wealth businesses these businesses now contribute around 50% of the total operating profit and we 5:25 5 minutes, 25 seconds expect their share to continue to rise as these businesses continue to grow at a faster pace. Operating profit after 5:32 5 minutes, 32 seconds tax for the fourth quarter grew by a strong 25% and also the strongest in the four quarters of the last financial 5:39 5 minutes, 39 seconds year. We exit the last quarter with an operating pad run rate of 661 crores. 5:46 5 minutes, 46 seconds Our long-term credit rating was upgraded to double A plus with stable outlook. 5:50 5 minutes, 50 seconds This is the highest rating ever granted to any non-bank uh domestic capital market player in India. Our total profit 5:58 5 minutes, 58 seconds after taxes including OCI for the fourth quarter and the full year is impacted due to marktomarket on our investment 6:05 6 minutes, 5 seconds which currently stands at around 9,000 crores. These are unrealized losses and most of it has already been recouped in the month of April. 6:15 6 minutes, 15 seconds uh the strong operating performance has been delivered in the backdrop of uh head headwinded external environment be 6:23 6 minutes, 23 seconds it weak markets impacting mark to market in our EUM in multiple businesses including asset management private wealth etc. This coupled with multiple 6:32 6 minutes, 32 seconds regulatory changes uh like the FNO changes, requirement of higher margins etc impacted market bread. 6:40 6 minutes, 40 seconds Also FI26 was a year of investments on all fronts in the group be people be brand or technology. We've not left any 6:49 6 minutes, 49 seconds stone unturned to maintain our leadership position in our businesses. 6:52 6 minutes, 52 seconds Turning to segmental performance asset and private wealth business comprises of the listed uh public equities AMC, the 6:59 6 minutes, 59 seconds private equity business, the real estate credit business as well as a private wealth management business. Our asset and uh asset management and private 7:07 7 minutes, 7 seconds wealth businesses continued uh momentum during the year with robust net flows of 70,000 crores AUM uh uh robust net flows 7:17 7 minutes, 17 seconds of 70,000 crores and an AUM of 3.7 lakh crores u which is up by 34% yearon year. 7:26 7 minutes, 26 seconds The operating leverage from rising AUM uh has delivered uh stronger profit growth and that should continue into the 7:33 7 minutes, 33 seconds future. Starting with our asset management business, our AMC AUM crossed 1.5 lakh crores with diversified uh with 7:41 7 minutes, 41 seconds diversified uh stream of active uh mutual funds, passive mutual funds, AIF and PMSs. 7:49 7 minutes, 49 seconds unique uh plan catered by our AMC crossed 1 cr in March 26 versus 77 lakhs 7:56 7 minutes, 56 seconds in March 25 which shows strong confidence by retail investors in our franchise. 8:01 8 minutes, 1 second This is around 16% client share of all mutual fund uh uh uh investor base. The 8:09 8 minutes, 9 seconds revival in the April month itself has propelled our average AUM uh to grow from 1.57 lakh crores of last year to 8:17 8 minutes, 17 seconds 1.8 8 lakh crores. Now uh our product bouquet is pretty young 8:25 8 minutes, 25 seconds as significant flows comes only once product has crossed the three-year track record. We launched five new mutual fund 8:33 8 minutes, 33 seconds active products in FI26 increasing our presence now to 82% of the industry AUM. 8:39 8 minutes, 39 seconds But importantly only six of our funds have a vintage of over 3 years. 8:46 8 minutes, 46 seconds uh 42, 29 and 26 funds with similar vintage in our top three peers in asset management business. We expect uh eight 8:56 8 minutes, 56 seconds funds to cross the three-year vintage by March 27 for us and 16 funds by March 28. 9:02 9 minutes, 2 seconds Some of these are best performing funds since inception in mainstream categories and this should help strong flows as well as diversification of our AUM over 9:11 9 minutes, 11 seconds the next two years. Our SIP flows in FI26 crossed 16,000 cr mark up 78% yearonear with a market share of 4.7%. 9:23 9 minutes, 23 seconds Resulting in a SIP AUM of 30,000 crores as of March 26. 9:29 9 minutes, 29 seconds Our latest AUM at 1.8 lakh crores is already 15% higher than our FI26 average of 1.57 lakh crores. 9:37 9 minutes, 37 seconds AUM growth will also be supported by the strong uh 18,000 cr annualized SIP run rate and as I mentioned earlier more 9:46 9 minutes, 46 seconds products crossing three-year vintage and proposed collections from the NFOS in the pipeline should help the discretionary flows as well. We growing 9:55 9 minutes, 55 seconds via the gift city route targeting inbound and outbound flows. 10:00 10 minutes To summarize, the AMC business uh will be an important growth and AR driver for MOFSL on the back of four factors. 10:07 10 minutes, 7 seconds Higher net flows market share than the AUM market share, improving market share in net flows led by greater number of products crossing three-ear vintage and 10:15 10 minutes, 15 seconds launch of new products. SIP run rate of 1500 crores and potential marktomarket after uh muted market returns for the 10:24 10 minutes, 24 seconds last two years. Turning to the alternates or the private markets business, FI26 was eventful for our alternates business too. We raised our 10:32 10 minutes, 32 seconds largest growth capital fund IBF5 raising close to a billion dollars. This leads to a 40% growth in our fee acroving 10:40 10 minutes, 40 seconds income from average AUM of 15,000 crores to a closing AUM of 21,000 crores. This AUM will be further supported by a 10:49 10 minutes, 49 seconds strong launch pipeline with a maiden private credit fund of 3,000 cr rupees. 10:55 10 minutes, 55 seconds the first commercial real estate credit fund that we hope to launch uh in the second half of this year besides the 11:03 11 minutes, 3 seconds launch of the series 7 of the residential real estate credit fund. 11:07 11 minutes, 7 seconds Alternates is a high focus segment for us given the trillion dollar aum in the developed market uh for just the you 11:14 11 minutes, 14 seconds know market leader. We have a strong franchise in growth capital and real estate and are confident to deliver industryleading IRS to our clients in all the products that we offer. 11:25 11 minutes, 25 seconds With the recent launch of our private credit uh fund and the forthcoming launch of our commercial credit uh fund, 11:32 11 minutes, 32 seconds we'll be offering a more comprehensive uh range of products in the alternates business which is only seeing higher allocations both from the family offices as well as institutions. 11:44 11 minutes, 44 seconds Here again to summarize the alternate asset management business will also be a key group driver and an ARR driver for the group on the back of three factors. 11:54 11 minutes, 54 seconds Large fundra larger fundraisers in every subsequent series. I would like to highlight that each of our growth 12:00 12 minutes capital funds have doubled in their size from the series 1 to two to three to four to five entry into adjacencies and 12:09 12 minutes, 9 seconds newer categories. And finally, more funds entering carry income recognition threshold, which will boost our carry income run rate from the current 250 crores perom. 12:19 12 minutes, 19 seconds The asset management business now contributes 33% of the group's operating profit after tax versus 26% in the last year. 12:28 12 minutes, 28 seconds Turning to our private wealth uh management business, we've made large investments in senior leadership as well as RM and we'll continue to do so 12:36 12 minutes, 36 seconds uh in a calibrated manner for FI27 as well. Our focus is on growing the ARUM which is currently at 46,000 crores 12:45 12 minutes, 45 seconds through various initiatives including advisory solutions, sending leverage solutions as a value ad for USI clients, exclusive co-investments, leveraging 12:53 12 minutes, 53 seconds groups, synergy, etc. Our 440 plus RM will also witness productivity improvement as 32% of them have a 13:02 13 minutes, 2 seconds vintage of 3 plus years. All this will help in revenue growth along with cost to income improvement driving profitability by operating leverage. 13:11 13 minutes, 11 seconds Turning to our wealth management business which comprises of retail broking distribution and our retail lending uh book which generates NI uh 13:19 13 minutes, 19 seconds led by a sharp focus on growing our distribution income and NI. Our broking revenues in the wealth management business segment now stand at 35% of the 13:27 13 minutes, 27 seconds fullear revenues compared to 60% 5 years ago. Distribution book grew by 41% to 13:34 13 minutes, 34 seconds nearly 41,000 crores on uh as of March 26. We are confident that our distribution book will continue to grow 13:41 13 minutes, 41 seconds meaningfully as we harness the cross potential of our huge client base. Our loan book in the segment rose by over 13:48 13 minutes, 48 seconds 30% reaching 6,000 crores. Our MTF market share is close to 7% and has headroom to grow further. Our broking 13:57 13 minutes, 57 seconds business continues to retain its leadership position as a full service broker. They're the largest broker in the cash segment on revenue market 14:05 14 minutes, 5 seconds share. our overall retail broking equity market share including commodities to 8.6% as of FY26. 14:13 14 minutes, 13 seconds Uh to summarize for this business, we expect our ADTO market share to improve as the global uncertainty subsides as 14:21 14 minutes, 21 seconds we've also historically witnessed rising market shares with rising markets. The distribution and lending book will continue to drive growth and increase its share in MOFSL's AR revenue pie. 14:32 14 minutes, 32 seconds Turning now to our capital markets business which includes both the institutional equities as well as the investment banking business. Uh with a 14:40 14 minutes, 40 seconds $5 trillion market cap and growing there is a base level of IB activity that the markets will see every year. 14:48 14 minutes, 48 seconds uh while there may be huge volatility quarter on quarter because of market conditions uh we believe that despite 14:55 14 minutes, 55 seconds all of this our IB business has sitted 52 deals in FI26 with a cumulative raise of nearly 83,000 crores and our fee 15:05 15 minutes, 5 seconds income delivered a strong 39% growth to 309 crores. 15:10 15 minutes, 10 seconds uh we are ranked number two in capital markets league table and number one in the QIP league table for FI26. 15:17 15 minutes, 17 seconds In the chief equities business, we uh aspire to take our coverage up from the current 360 uh to nearly 500 companies. 15:28 15 minutes, 28 seconds Uh we believe we built a strong franchise and a diversified uh uh product portfolio. uh we have headroom 15:35 15 minutes, 35 seconds to grow in some of the areas like advisory as well as M&D in the coming years. Our size per deal is materially higher than in the past and with a 15:43 15 minutes, 43 seconds strong deal pipeline uh we believe this business is also poised for growth in the coming year. Turning to the [clears throat] housing finance 15:51 15 minutes, 51 seconds business, uh we concluded another year of solid performance with disbburments rising by 28% to 2,300 crores. AUM 16:00 16 minutes rising by 25% to 6,100 crores. The housing finance business raised $100 million from ADB validating the strong franchise. 16:09 16 minutes, 9 seconds Uh we expect the housing finance business uh having formed a strong base uh and a very strong leadership team to 16:17 16 minutes, 17 seconds witness strong growth over the next two three years. 16:20 16 minutes, 20 seconds A business has a strong capital adequacy ratio, a low leverage giving us enough growth levers without external equity capital dependency. 16:29 16 minutes, 29 seconds To conclude, the rise in wealth of uh the nation to over a hundred trillion dollars combined with financial financialization of savings, powerful 16:38 16 minutes, 38 seconds tailwinds in terms of the rising weight of capital markets within the Indian market cap. uh all these augur well you 16:45 16 minutes, 45 seconds know uh for the group in this space mutral swall's decadal track record of 33% compounded operating profit growth 16:53 16 minutes, 53 seconds and an average RO of 23% uh entirely through internal approvals with no dilution with rising market share in 17:01 17 minutes, 1 second each businesses entry into promising adjacencies in nearly each of our businesses rising share of annuity 17:08 17 minutes, 8 seconds revenues to over 60% and finally improving quality and predictability of the cash flows driven by rising share of 17:15 17 minutes, 15 seconds annuity revenues all over well FI25 and FI26 these two financial years were marked by regulatory tightening combined 17:24 17 minutes, 24 seconds with weak markets despite this MOSSL delivered an operating pad growth of 16% in the last year and 25% in the fourth 17:32 17 minutes, 32 seconds quarter of last year with regulatory headwinds in the base continued resilience shown by Indian investors uh the future outlook continues to look 17:40 17 minutes, 40 seconds promising to us Uh with this I conclude my opening remarks and open the floor for Q&A. Thank you. 17:47 17 minutes, 47 seconds Thank you very much. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchstone phone. 17:58 17 minutes, 58 seconds If you wish to withdraw yourself from the question, you may press star and two. Participants are requested to use only handsets while asking our question. 18:07 18 minutes, 7 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. You may please press star and one to ask questions. 18:20 18 minutes, 20 seconds The first question is from the line of Mahek from MK Global. Please go ahead. 18:26 18 minutes, 26 seconds Yeah. Hi. Uh thank you for the opportunity. So um u I have couple of questions. So first with respect to the 18:33 18 minutes, 33 seconds AMC business, right? Uh so if you look at the SIP it was uh market share, it has dipped a bit during the quarter. So 18:41 18 minutes, 41 seconds just wanted to know your thoughts on the same and what initiatives uh are basically being taken to regain that market share. Uh second would be on the 18:50 18 minutes, 50 seconds revenue yields. Uh so uh how should we look at the revenue yields uh going forward with respect to one uh the 18:57 18 minutes, 57 seconds regulatory change uh in terms of TER and second how are you looking at the alternate yields as well. Um because if 19:04 19 minutes, 4 seconds I look uh uh during the quarter we have seen uh some bit of uh expansion in the yields. Uh I think that would be largely 19:11 19 minutes, 11 seconds on account of u u on account account of new u funds are which are being launched. So if you can clarify on that 19:20 19 minutes, 20 seconds and third question would be uh on on the private wealth management segment. So in um uh if we see the lending assets have 19:27 19 minutes, 27 seconds seen strong uh inflows during the quarter. So what has driven this um um um growth in AUM and and and secondly 19:36 19 minutes, 36 seconds the inflows also. So if you can just clarify on these things. Yeah. Yeah. Uh thanks for your questions. 19:46 19 minutes, 46 seconds The first one was on SIP. 19:49 19 minutes, 49 seconds So we are having a uh SIP run rate of 1,400 plus crores a month. There is a slight decline in that on two counts. 20:01 20 minutes, 1 second One, our international funds are no longer able to uh you know take in new monies and second the micro cap fund is 20:10 20 minutes, 10 seconds also locked. So that's the primary reason and then yes uh on the active side we have seen a small drop in SIP. 20:20 20 minutes, 20 seconds Now SIP book growth is very very linked to strong performance. As that comes 20:28 20 minutes, 28 seconds back to us especially in the main categories you should again expect SIP books to climb but as we speak they are uh you know at last year levels itself. 20:42 20 minutes, 42 seconds Now second on fees our fees uh as a consequence of the uh T 20:50 20 minutes, 50 seconds changes has continued to be unimpacted in fact uh slightly improved for uh you 21:00 21 minutes know our cohort of AUM per category so that hasn't impacted us on the alternate 21:08 21 minutes, 8 seconds side also our retention rates have been maintained If at all you see a compression in 21:15 21 minutes, 15 seconds margins for us it is on account of mix effect. Uh our fastest growing part of 21:21 21 minutes, 21 seconds business uh for last quarter for example was passives where our retention is lower than active which is the second 21:30 21 minutes, 30 seconds fastest growing part of our business uh versus the uh alternates where the growth was the slowest but the yields 21:38 21 minutes, 38 seconds are the highest. So the mix effect does result in some downward pressure. 21:46 21 minutes, 46 seconds Yeah. On the banking side in private wealth it as Naven had mentioned it's a stated strategy to provide uh solutions 21:53 21 minutes, 53 seconds to ultraise family offices and HNIs uh to enhance yield. So basically it's a combination of lending against uh 22:01 22 minutes, 1 second securities, lending against uh investment assets and uh this basically contributes to growth in assets as well as uh uh AR revenues. 22:15 22 minutes, 15 seconds Got it. Got it. Uh I had one more last question uh with respect to the uh other expenses which is the admin and the 22:22 22 minutes, 22 seconds other expenses. So we have seen a sequential growth of around 20%. So I just wanted to uh understand whether it 22:31 22 minutes, 31 seconds is u some s sort of marketing or investment engagement program related expense or uh how and and particularly 22:39 22 minutes, 39 seconds how should we look at uh it um going forward in FI27. 22:43 22 minutes, 43 seconds Yeah. So uh quarter 4 includes uh predominant impact of higher marketing brand promotion and also the CSR 22:52 22 minutes, 52 seconds expenses. So bulk of which have actually been you know incurred in the quarter four. So you will see the data slightly 22:59 22 minutes, 59 seconds higher on a sequential basis. However you know for the full year the overall other expenses are up by about 10% uh 23:07 23 minutes, 7 seconds for the full financial year. Uh bulk of the other expenses includes our marketing and tech you know where we spend almost about five and a half% of 23:16 23 minutes, 16 seconds our net revenues for this financial year at 526. So that's the larger impact of their experience. 23:26 23 minutes, 26 seconds Got it sir. Thank you so much officer. Thank you. 23:30 23 minutes, 30 seconds Thank you. The next question is from the line of Deep Bakil from Bandhan AMC. Please go ahead. 23:38 23 minutes, 38 seconds Hello. Thank you for the opportunity sir. Am I audible? Yes. Yes. Yes sir. 23:42 23 minutes, 42 seconds Sir uh a couple of questions. I mean uh any any guidance on the MTF book? I understand that we had around 6,500 23:50 23 minutes, 50 seconds crores of MTF book as of 9 months FI 26 uh which has been slowed down to 5,700 crores as as on March 26. So any 23:59 23 minutes, 59 seconds strategic thing that we are thinking around this I mean uh I understand that our major uh lending uh I mean this is 24:06 24 minutes, 6 seconds the major uh e lending vehicle wherein uh you know majorly debt is needed in this book itself. So any guidance sir on 24:14 24 minutes, 14 seconds the MTS book and how are we looking at it uh in 27? 24:20 24 minutes, 20 seconds Uh see overall if we look at our MTS book u that has actually grown for the full year at 40% uh which is uh strong 24:30 24 minutes, 30 seconds surge you know and our cash market share is uh also about you know 7%. And MTF market share is also a replica of that. 24:39 24 minutes, 39 seconds So we definitely have a very strong balance sheet to you know growth as book uh over uh last uh few years if you look 24:46 24 minutes, 46 seconds at there has been a very strong growth of our MPF assets and we expect you know similar strong you know growth to recur 24:54 24 minutes, 54 seconds in the coming periods because we are the largest broker in terms of the cash brokerage revenue pie uh and that is 25:02 25 minutes, 2 seconds where we will carry an edge in terms of the higher growth for our MPFO. 25:07 25 minutes, 7 seconds Okay. And sir I mean any quarter on quarter impact sir I mean uh or it is a strategic move that you have taken in this quarter to [clears throat] reduce 25:15 25 minutes, 15 seconds maybe on a quarterly business then again increase once market stabilizes. 25:20 25 minutes, 20 seconds Look it's more of you know market impact you know sequentially more or less across the industry the book is marginally lower. So it's a very 25:28 25 minutes, 28 seconds marginal production. However you know very confident of you know growing this book. 25:35 25 minutes, 35 seconds Okay. And sir uh any guidance on the broking income piece because I understand there was some uh degrowth in 26 25:42 25 minutes, 42 seconds uh but for 27 and a mean 27 I understand once you know market condition stabilizes volumes will return to 25:50 25 minutes, 50 seconds normaly uh so any kind of number that you can put to broking revenues uh I mean over 27 25:59 25 minutes, 59 seconds you're talking of the brokerage line Right. So broking information yeah broking revenues if you look at you 26:06 26 minutes, 6 seconds know last entire financial year was you know especially starting from Jan 25 to December I would say that uh the 26:15 26 minutes, 15 seconds revenues were lower uh mainly because of the lower volumes and uh the impact of the you know regulatory change uh which 26:22 26 minutes, 22 seconds had come on the FNO segment uh especially and also the lower overall cash volumes in the industry. However, if you look at you know now quarter four 26:31 26 minutes, 31 seconds uh again the volumes have fully catched up right our market share overall ed market share is also up for the year by 26:39 26 minutes, 39 seconds almost about 100 pages plus uh so you know quarter 4 if you look at the revenue growth is almost 33% uh you know 26:46 26 minutes, 46 seconds y and again you know the base is higher now because uh even moving to the you know current financial year over last 26:55 26 minutes, 55 seconds financial year April over April is also you know at a very higher air base. Uh so we expect you know the brokerage line item to you know decently catch up for 27:03 27 minutes, 3 seconds the entire financial year given that uh the regulatory impact is behind and the volumes have again catched up to the pre-regulatory change levels. 27:14 27 minutes, 14 seconds Sure sir one last thing sir I mean of the MTM laws that we have had on the treasury book around thousand odd crores at console level. So sir I mean uh my 27:22 27 minutes, 22 seconds understanding is that I mean post March 30th uh I mean equities have rallied and as you mentioned in your PPT as well majority of that loss has already been 27:29 27 minutes, 29 seconds recouped. So uh sir that thousand cr loss is unrealized right we have not booked any realized there's no realized impact it's unrealized gain correct 27:36 27 minutes, 36 seconds unrealized loss. Yes, this is uh a national marktomarket loss uh which is you know we have to revalue all our 27:45 27 minutes, 45 seconds investments at mark to market based on the India's requirements and that's why you know these are notional losses which 27:52 27 minutes, 52 seconds we you know we separately disclose across in terms of our operating performance and treasury performance and as you know most of these have been you 28:01 28 minutes, 1 second know recouped back in the April and just to add uh your uh the long-term 10ear 28:08 28 minutes, 8 seconds uh plus track record uh is that this investment book has you know generated an IR of 18%. Now this changes year to 28:17 28 minutes, 17 seconds year because like you at the 31st March where there is a market draw down sometimes these compounded returns also look different but longer term we've 28:24 28 minutes, 24 seconds seen returns you know at highs were as high as 19 at lows were as low as 15 and a half uh but longer term we've seen the 28:32 28 minutes, 32 seconds compounding at 18%. to that when you add the post buyback in some years or post dividend free cash flows that are added 28:41 28 minutes, 41 seconds to this book this book is actually compounded for the last 10 years at the rate of 40% peranom and that is what I 28:48 28 minutes, 48 seconds explained up front in the corn call remarks that the rising capital needs of the businesses both due to scale and 28:55 28 minutes, 55 seconds regulations have been internally funded on the back of this uh this book and uh you will see lot of quarterly you know 29:03 29 minutes, 3 seconds depend Depending on the market's volatility in this book, sometimes you may have unrealized gains. Uh sometimes you may have unrealized losses and 29:10 29 minutes, 10 seconds that's why we separately call out the operating profit after tax number for each business so that there is no confusion about uh you know this line item with the operating businesses. 29:22 29 minutes, 22 seconds Sure sir. Thank you. All the best. 29:25 29 minutes, 25 seconds Just to add uh uh you know all of these investments are actually uh you know collateralized uh with the lenders and 29:33 29 minutes, 33 seconds serve as uh you know very large lines available uh for the operating businesses uh of the firm and uh you 29:42 29 minutes, 42 seconds know effectively the collateral is also expanding at the rate of 40% peranom 29:49 29 minutes, 49 seconds sir got it thank you thank Finally, 29:57 29 minutes, 57 seconds a reminder to all the participants that you may please press star and one to ask questions. 30:03 30 minutes, 3 seconds The next question is from the line of Nidesh Jen from Invest. Please go ahead. 30:10 30 minutes, 10 seconds Uh the thanks for the opportunity. Uh so first question is on asset management business. Uh is there any update on the uh on the investment team uh leadership 30:18 30 minutes, 18 seconds in the investment and on the asset management side? Uh secondly, what is the guidance for net flows uh in the uh AMC business for FI27? 30:30 30 minutes, 30 seconds Yeah. Uh yes. So uh over the last period you would be happy to know we have increased 30:38 30 minutes, 38 seconds the team size on both the alternates and mutual fund in terms of managers and research. Overall the investment team 30:47 30 minutes, 47 seconds inclusive of passive is now over 50 members strong. Uh as far as the leadership on the mutual fund side goes 30:56 30 minutes, 56 seconds uh we are evaluating both internal team members and external we have a short list. We will take a decision uh soon. 31:05 31 minutes, 5 seconds Now uh in terms of uh net flows 31:11 31 minutes, 11 seconds uh last quarter numbers our net flows declined. Jan was the worst month for 31:19 31 minutes, 19 seconds our active net flows but in that month passives uh you know did very well and overall we collected over 2 and a half 31:27 31 minutes, 27 seconds thousand crores. uh Feb was when overall our numbers were uh weaker as the uh 31:34 31 minutes, 34 seconds gold and silver ETF kind of a product flows normalized as we speak into the uh 31:41 31 minutes, 41 seconds so for for the last quarter our net flow market share was lower than our AUM 31:48 31 minutes, 48 seconds market shares but as we speak uh the trends in April suggest that our net 31:55 31 minutes, 55 seconds flow market share would be higher than ours. 31:59 31 minutes, 59 seconds AUM market share uh so just to clarify net flow AMC so 32:07 32 minutes, 7 seconds mutual fund net flow market share may be higher than market share for the month of April okay that's that's a good good news 32:14 32 minutes, 14 seconds and secondly that so if you look at the capital market segment we are seeing advent of digital brokers and they are now impacting a lot of segments uh we 32:24 32 minutes, 24 seconds are seeing our market share declining in cash and FNO but they are also equally becoming very strong distributors on the mutual fund side. So in that uh light 32:32 32 minutes, 32 seconds how are we planning our businesses from a longerterm perspective uh and how are we trying to build these businesses so that uh because what we see as a trend 32:40 32 minutes, 40 seconds that customer is definitely moving towards those platforms and uh some of the numbers are quite glaring that 60 70% of the new SIPs are getting opened 32:48 32 minutes, 48 seconds by these fintech platforms. uh so that has repercussion for all our businesses uh from a longerterm perspective and how are we thinking uh to build business in that light. 32:59 32 minutes, 59 seconds So uh when it comes to the overall wealth management business uh which we are building on to we have always been focusing on the research and advising 33:08 33 minutes, 8 seconds models and if you look at our model whether it's the uh franchising segment which is our biggest segment within the broking and then the direct side the PCG 33:17 33 minutes, 17 seconds model and the branch model we are very well aligned with our research and advisory le uh model along with the tech 33:25 33 minutes, 25 seconds uh in the overall business. So what we have seen is that where we have focusing on the quality of the customer where we 33:32 33 minutes, 32 seconds can add value to the customer and that is where we have been as uh having discussed the overall cash market share on the revenue pie we are very much 33:40 33 minutes, 40 seconds higher and we see that we can align our strategy towards that in a big way for the uh overall brok. 33:51 33 minutes, 51 seconds So as you see our overall wealth has also been growing consistently and has grown 40% in the last year itself. Uh as 33:58 33 minutes, 58 seconds we talk we at around 44,000 crores. So that twin model is getting well aligned. 34:04 34 minutes, 4 seconds At the same time uh when you look at the discount model we feel that the bigger traders are the proposition where the 34:11 34 minutes, 11 seconds overall rev pi gets uh aligned. So we are trying to see how we will try to align to the traders which take the 34:18 34 minutes, 18 seconds bigger pie in the discount market. So how do we position ourselves for the bigger players is something which we are also working up parally to take care of 34:27 34 minutes, 27 seconds the overall market share from a market perspective. Sure. Sure. Uh that's it from my side. Thank you. 34:36 34 minutes, 36 seconds Thank you. Thank you. 34:40 34 minutes, 40 seconds The next question is from the line of Deepan Jan Go from city. Please go ahead. 34:45 34 minutes, 45 seconds Uh hi uh good morning everyone. Uh few questions from my side. uh first uh on the private wealth business uh you know 34:53 34 minutes, 53 seconds if you were to look at your clientele base over the past uh 2 three years versus let's say what it was let's say five six years back I just wanted to 35:02 35 minutes, 2 seconds understand some sense of uh the clientele quality both in terms of ticket side and in terms of uh occupation business uh domain of 35:11 35 minutes, 11 seconds expertise etc. Uh if you can give some color uh on that or maybe quantify some of those cohorts. Uh the second question 35:19 35 minutes, 19 seconds uh is uh on the transactional revenues uh x of broking uh in the private wealth and maybe to some extent on the wealth 35:26 35 minutes, 26 seconds business uh also uh how do you see the pipeline going into FY uh 2027 uh given the backdrop of whatever has been going 35:34 35 minutes, 34 seconds on globally and also how do you really u uh you know kind of manage your risk prudence in this uh seg you know while we kind of when you kind of sign a deal 35:43 35 minutes, 43 seconds for the transactional uh section uh versus let's say focus on uh feeds. How do you really manage that? Uh the third question uh is on the alternate segment. 35:54 35 minutes, 54 seconds Uh we are seeing uh some of the large asset management companies uh entering this segment in an aggressive manner or at least from their commentary it seems 36:02 36 minutes, 2 seconds that they will be aggressive. Uh can you give some color on the white spaces in this segment? I mean your pipeline is robust in terms of nuclear but in terms 36:09 36 minutes, 9 seconds of the white spaces in the segment the supply side constraints um you know some of those uh if if you can get some color qualitatively and lastly uh one data 36:18 36 minutes, 18 seconds keeping question uh is there any uh guidance or uh expectation around uh 36:24 36 minutes, 24 seconds carry income for FI27 or 28 right uh so I'm taking the private 36:31 36 minutes, 31 seconds wealth question first uh essentially the way to look at it is uh there are broadly three segments in private wealth. There is a HNI segment which is 36:40 36 minutes, 40 seconds broadly 5 to 100 crores. Then there is an ultra H&I segment which is 100 plus and then there are the family offices. 36:46 36 minutes, 46 seconds So we operate in all three segments and uh we put significant capabilities and resources to improve the value 36:54 36 minutes, 54 seconds proposition in the ultra H&I and family office segment. uh whereas in the HNI segment we are increasing footprint by 37:01 37 minutes, 1 second having presence in many more locations where we see high growth of HNIs. I think the best lead indicator to see the 37:10 37 minutes, 10 seconds uh at least the headline quality of assets is the AM per RM. If you see the AM per RM has been steadily increasing 37:17 37 minutes, 17 seconds couple of years back it was 300 crores and right now it's about 450 crores and this is on an increased base of RMS. So 37:25 37 minutes, 25 seconds essentially our penetration across segments is growing and uh at the back end and and I'm just answering your second question what we've done is we've 37:34 37 minutes, 34 seconds significantly enhanced the product and investment capabilities within private wealth to cater to all these segments. 37:40 37 minutes, 40 seconds So we have u uh u recruited people in equities in alternates uh in multi-asset 37:47 37 minutes, 47 seconds solutions uh as well as certain um uh bespoke uh transaction strategies. Uh 37:55 37 minutes, 55 seconds the pipeline of transactions is very very robust. uh what happens there is uh whilst uh in the near term the markets 38:04 38 minutes, 4 seconds could be cyclical and that could impact a particular asset class but essentially right now uh we have capabilities across asset classes. So there are there are 38:13 38 minutes, 13 seconds private debt transactions where uh we are seeing a lot of flows from family offices. Similarly uh last year we I 38:20 38 minutes, 20 seconds mean early last year we saw a lot of flows in unlisted equity transactions. 38:24 38 minutes, 24 seconds So whilst the uh sentiment and the mood may impact uh flows into a particular asset class temporarily however given 38:32 38 minutes, 32 seconds the multi-asset capabilities that we've built uh the the transaction capabilities are becoming u uh much 38:40 38 minutes, 40 seconds smoother uh on a on a quarter-on quarter basis. Uh again uh to answer your last question on uh due diligence I think we draw a lot from the group capabilities. 38:50 38 minutes, 50 seconds If you see we've invested significantly at the group level as well to enhance capabilities in private credit on the real estate front and we anyway have a 38:58 38 minutes, 58 seconds very strong private equity uh capabilities. So coupled with the capabilities on the private wealth side in the investment team and the group 39:06 39 minutes, 6 seconds capabilities uh the underwriting process uh is very very stringent and uh rigorous. So before deal would be taken 39:14 39 minutes, 14 seconds to market or to clients there is a lot of uh work that goes on before uh doing that. 39:21 39 minutes, 21 seconds Yeah. Uh in terms of uh AMC 39:27 39 minutes, 27 seconds you asked about uh corporate uh carry uh income possibilities. 39:36 39 minutes, 36 seconds Okay. The competition as far as we are concerned uh on the alternate side we have gained 39:44 39 minutes, 44 seconds market shares. We are amongst the top few in the industry uh with uh you know 39:51 39 minutes, 51 seconds very distinct products with strong story lines and I think lot of our products are turning into brands are being asked 40:00 40 minutes by the uh investors for investing. So we have a very very differentiated uh 40:08 40 minutes, 8 seconds product basket. On top of it there are unique products where we mix listed with unlisted. Uh not too many houses have uh 40:18 40 minutes, 18 seconds the capability of running that kind of a product. 40:23 40 minutes, 23 seconds Now uh over and above the long only uh investing in the alternate side we also have uh quantbased investing. 40:34 40 minutes, 34 seconds Uh so there is a strategy which where we have some significant amount of monies which is now looking uh very very 40:43 40 minutes, 43 seconds strong. So uh overall the alternate basket for us uh uh we think is very 40:50 40 minutes, 50 seconds very relevant for uh uh investors in the mutual fund side 40:57 40 minutes, 57 seconds uh we have expanded our product basket tremendously. So when a competition comes in know there is something which 41:04 41 minutes, 4 seconds happens on year 1 there is something which happens after year three. So we see as an industry higher traction after 41:12 41 minutes, 12 seconds a fund crosses three years of uh uh existence. 41:17 41 minutes, 17 seconds Now for us from a six uh uh product uh basket we are now over 17. As we speak 41:24 41 minutes, 24 seconds we have a fund launch going on. So the contra fund is on. Uh now one by one 41:33 41 minutes, 33 seconds these products will start to complete uh three years. The first one would be a small cap fund which completes three 41:41 41 minutes, 41 seconds years in December. A large cap fund will do that uh next year in Jan and every 41:48 41 minutes, 48 seconds two months there will be a meaningful product which will complete uh 3 years. 41:53 41 minutes, 53 seconds So we think uh in the next leg of growth versus the last one uh our uh inflows 42:02 42 minutes, 2 seconds will be way more diversified versus what we had as far as the variable additional 42:12 42 minutes, 12 seconds returns is concerned. So we don't give out guidances. However, you know, as explained in our last conall, uh we have 42:22 42 minutes, 22 seconds multiple number of funds which has reached in the last cohort of their life which is last three years where you know 42:31 42 minutes, 31 seconds our IRS are well above the hurdles and uh that is the reason that we expect you know meaningful uh variable returns to acrew in the coming financial periods. 42:42 42 minutes, 42 seconds Got it. Maybe just one small small follow up on my first question. You know uh you know you you are a boutique wealth manager uh which has gained scale 42:51 42 minutes, 51 seconds over the years in terms of you know this uh increasing clients or kind of uh increasing presence in Alpha H&I and 42:59 42 minutes, 59 seconds family offices and your ability to kind of source large deals and execute large deals. I mean what has changed in terms of you know uh how you're 43:06 43 minutes, 6 seconds differentiating uh compared to let's say a um small scale wealth manager or some of the bank based uh wealth uh outfits 43:14 43 minutes, 14 seconds uh I mean what capabilities do you really have to kind of uh maintain or gain market share over medium to long term? 43:22 43 minutes, 22 seconds Yeah. So uh I mean whilst our size has increased over time I mean our ambitions have never been boutique uh and now the 43:30 43 minutes, 30 seconds size is reflecting our ambition but the runway for growth is much much larger from here but there are a lot of uh 43:38 43 minutes, 38 seconds capabilities that help us uh you know bring these boutique transactions to customers. So first is if you look at uh 43:46 43 minutes, 46 seconds the group level capabilities I mean we have u uh businesses across capital market segments whether it's alternatives whether it's institutional 43:54 43 minutes, 54 seconds equities and we have significant skin in the game in all our products. So this allows us to source very proprietary 44:02 44 minutes, 2 seconds transactions. Uh similarly if you look at uh some of the group products whether it is uh capabilities that we have 44:10 44 minutes, 10 seconds created in private credit whether the capabilities that we have built in private uh equity uh and the uh 44:17 44 minutes, 17 seconds investment that we have in research across these businesses. Uh that again allows us to uh you know do due 44:25 44 minutes, 25 seconds diligence on many many transactions. we see many transactions and uh that also helps us uh source transactions across 44:34 44 minutes, 34 seconds asset classes whether it is real estate, whether it is private credit, whether it is private equity. So um I guess uh you 44:41 44 minutes, 41 seconds know this should answer both your questions. 44:44 44 minutes, 44 seconds Uh no great thanks for the explanation and all the best. 44:48 44 minutes, 48 seconds On a lighter note uh our leadership will be quite offended by the use of the word boutique for any of our businesses. Uh but that's just on a lighter note. We 44:56 44 minutes, 56 seconds have scale ambitions and leadership ambitions in every single business of ours. 45:01 45 minutes, 1 second No, no, I agree. I mean I mean the boutique word is more from the fact that you know uh some of the wealth outfits have a banking license. 45:12 45 minutes, 12 seconds Thank you. 45:15 45 minutes, 15 seconds The next question is from the line of Lalith Moando from Equir Securities. Please go ahead. 45:21 45 minutes, 21 seconds Yeah. Hi sir, good afternoon. So just two three questions. So firstly on on the mutual fund business side so we have seen that our market share in that uh in 45:29 45 minutes, 29 seconds MF flows have come down from from 7 and a half% to 2 uh around 3%. So any particular channel where we have seen a decline uh in the flows or is it like 45:39 45 minutes, 39 seconds broadly uh across the channels over there and how and while we have indicated that currently it is going 45:45 45 minutes, 45 seconds above a market share but um so is it around the current levels or we have improved mater to to earlier levels. 45:53 45 minutes, 53 seconds Second was on the private management. So this quarter we have added a material number of families over there like more 46:00 46 minutes than 9,000. But also could you give us more color like on within within the within this family count like how how 46:08 46 minutes, 8 seconds much of these families will be there where we have a material relationship of more than 10 growth and and where we can potentially increase further 46:16 46 minutes, 16 seconds relationship over there. And lastly from a two-year perspective like uh given the current business construct how should we look at the from a revenue perspective 46:25 46 minutes, 25 seconds and for a profitable perspective across different segments like what could be the desired mix between different segments. 46:33 46 minutes, 33 seconds Okay. So I'll answer the third question first. uh I as I explained to you uh year after year uh over the last 10 46:41 46 minutes, 41 seconds years over the last 5 years 3 years and over the last year FI25 also uh u our annuity stream of revenues have 46:50 46 minutes, 50 seconds consistently gone up uh they are now at over 60% of the total revenues uh the asset management alternates asset uh 46:58 46 minutes, 58 seconds private businesses as well as the private wealth businesses share of profitability because of their annuity nature do have consistently gone up and 47:06 47 minutes, 6 seconds we see that a trend as I called out continue to rise including in uh FI27 over FI 26 about your first question 47:16 47 minutes, 16 seconds about the uh net flows in asset management market share decline channel wise we don't split that out channel wise but we'll still give you some color 47:24 47 minutes, 24 seconds on uh uh the contraction in the net flow market share 47:30 47 minutes, 30 seconds yeah to give you some color uh we retained more or less. So the drop was 47:37 47 minutes, 37 seconds there in block flows as well. So we saw some bit but that was small. Uh we saw heightened uh redemption pressure in the 47:45 47 minutes, 45 seconds month of Jan and Feb. Uh it reduced in March and it is uh actually below normal in uh April and which is why our net 47:55 47 minutes, 55 seconds share we think uh has again come back over uh AUM market share in April. Now 48:02 48 minutes, 2 seconds of the channels uh we thought the wealth channel was where uh the pressure was 48:09 48 minutes, 9 seconds the highest. Retail and uh digital channels held out uh much better. 48:20 48 minutes, 20 seconds Yeah. I think on your quality of clients just to give you some color I mean we we work with 9,000 families of which almost 48:28 48 minutes, 28 seconds 50% uh our ultra H&I potential and the scale of clients quality of clients is 48:35 48 minutes, 35 seconds steadily improving and again like I said you know one of the headline numbers that you should look at that is in spite of the denominator going up which is the 48:43 48 minutes, 43 seconds number of RMS the AM per RM has been steadily rising Sure. 48:52 48 minutes, 52 seconds And so just lastly data question. Did we answer your questions? 48:57 48 minutes, 57 seconds Yes sir. So just last one one last data meeting question. Hello. 49:06 49 minutes, 6 seconds Yes please proceed sir. 49:08 49 minutes, 8 seconds Yes sir. Thanks for the answer. Just one last data keeping question. So in the wealth business we have seen sir uh some pick up in the TV uh transactional 49:16 49 minutes, 16 seconds income over there transaction distribution income. So what would attribute to the same 49:24 49 minutes, 24 seconds March quarter typically uh the transaction income in the wealth business is higher because of you know the uh insurance distribution revenue. 49:32 49 minutes, 32 seconds So you know quarter 4 is generally a a seasonal very large you know uh insurance uh distribution business. So 49:39 49 minutes, 39 seconds that is the delta coming out of the distribution lenders in quarter 4. Thank you so much sir. 49:48 49 minutes, 48 seconds Ladies and gentlemen, we will take that as a last question for today. I now hand the conference over to the management for closing comments. Thank you and over to you sir. 49:57 49 minutes, 57 seconds On behalf of Mutilus Financial Services, I thank every participant for attending the Q4 FY26 call. Uh in case of any 50:06 50 minutes, 6 seconds further queries please do get in touch with our investor relations desk. Uh thank you and have a good day. 50:12 50 minutes, 12 seconds Thank you very much sir. Thank you members of the management. On behalf of Motila Losal Financial Services Limited that concludes this conference. We thank 50:21 50 minutes, 21 seconds you for joining us and you may now disconnect your lines. Thank you.