Research Report

by
Anusha Mandloi

1 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi

Motilal Oswal Financial Services (MOFSL) was founded in 1987 by Mr. Motilal Oswal and Mr. Ramdeo
Agrawal as a sub broking firm. In just three years Motilal Oswal became members of on The Bombay Stock
Exchange (BSE). It was incorporated in year 1995.

Motilal Oswal offers a wide range of financial services such as wealth management, broking and distribution,
commodity broking, portfolio management services, institutional equities, private equity and investment
banking services. It offers wealth management services under the name Purple.

MOFSL has subsidiaries enveloping the different functions in the names of Motilal Oswal Securities (MOSL),
Motilal Oswal Investment Advisors (MOIA), Motilal Oswal Commodities Broker (MOCBL) and Motilal Oswal
Venture Capital Advisors (MOVC).

Motilal Oswal Financial Services is a known brand among retail and institutional investors in India, with a
presence in over 1533 business locations across over 487 cities.

Quarterly Performance
MOFS reported an over four fold increase in its consolidated net profit at Rs 165 crore in the quarter ended
December, driven by healthy growth in broking and asset management businesses.

 For the nine-month period, profit after tax grew 196 per cent to Rs 437 crore from Rs 148 crore.

 Asset management business (AUM) across mutual fund, portfolio management services (PMS) and
alternative investment fund (AIF) grew 7 per cent to Rs 40,096 crore.

 Its asset management business reported a 22 per cent jump in its net profit at Rs 41 crore in the
quarter under consideration from Rs 34 crore in the year-ago period.

 Capital markets businesses that comprises of retail broking, institutional equities and investment
banking reported a net profit of Rs 47 crore in the third quarter compared to Rs 34 crore last year same
period.

 Its housing finance business's profit stood at Rs 16.1 crore in October-December quarter compared to a
loss of Rs 94 crore in the year-ago period.

BOARD OF DIRECTORS
2 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi
 MOTILAL
OSWAL (Chairman,
Managing Director and Chief
Executive Officer)

NAVIN AGRAWAL RAAMDEO AGRAWAL ABHAYA HOTA

(Managing Director) (Joint Managing (Director)
Director)

ASHOK JAIN AASHISH SOMANIYA HIMANSHU VYAPAK

(Director) (CEO- Asset (Director)
management business)

3 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi

 REKHA SHAH SHARDA AGRAWAL
(Independent Director) (Independent Director)

CEO

Mr. Motilal Gopilal Oswal co-founded Motilal Oswal Financial Services Limited in 1987 and serves as its Chief
Executive Officer and Managing Director. He served as the Chief Financial Officer of Motilal Oswal Financial
Services Limited until April 30, 2011. He serves as Member of Advisory Board at Sprout Venture Partners. He
served as the Chairman of Motilal Oswal Financial Services Limited and has been its Director since May 18,
2005.He serves as the Chairman of Motilal Oswal Home Finance Limited. Mr. Oswal served as the Chairman of
the Board of Passionate Investment Management Private Limited, Motilal Oswal Commodities Broker Private
Limited and Motilal Oswal Investment Advisors Private Limited until March 31, 2011. He was elected the
Director of BSE and joined the governing board in 1998. Mr. Motilal Oswal has served on Governing Board of
the BSE, Indian Merchant’s Chamber (IMC) and has also served on various committees of BSE, NSE, SEBI and
CDSL. His Directorships held in other companies as on date include, MOPE Investment Advisors Private Limited
and Motilal Oswal Trustee Company Limited. He served on various committees of BSE, NSE, CDSL and SEBI.
Mr. Oswal was awarded the Rashtriya Samman Patra by Central Board of Direct Taxes for a period of 5 years
commencing FY 1995-1999. He is a Chartered Accountant and Member of Institute of Chartered Accountants
of India.

Table showing the details of Key Peoples of MOTILAL OSWAL FINANCIAL SERVICES

4 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi

Name Position Tenure Compensation Ownership

Raamdeo Agrawal Co-Founder & Non- 0.67yr ₹27.66m 6.27% ₹5.0b

Executive Chairman

Motilal Oswal Co-Founder no data ₹24.13m 5.85% ₹4.6b

Navin Agarwal MD & Director 15.08yrs ₹79.90m 4.98% ₹3.9b

Ajay Menon CEO of Broking & 1.83yrs ₹23.50m 0.27% ₹213.9m

Distribution Business and
Whole-time Director

Vivek Paranjpe Independent Director 9.42yrs ₹890.00k no data

Praveen Independent Director 8.92yrs ₹910.00k no data

Kumar Niranjan
Tripathi

Sharda Agarwal Independent Woman 5.92yrs ₹840.00k no data

Director

Rekha Shah Independent Director 1.83yrs ₹830.00k 0.00019% ₹150.3k

STRENGTHS WEAKNESSES

 Promoters increasing shareholding (397.8%  Has a high level of debt

returns for Nifty 500 over 5.9 years)
 Book Value per share Improving for last 2 years
 Stocks where mutual funds increased holdings in
the past month (875.5% returns for Nifty 500
over 5.1 years)
SWOT
 ANAYLSIS of MOTILAL OSWAL
Company with Zero Promoter Pledge
 FII / FPI or Institutions increasing their
shareholding
 Mutual Funds increased their shareholdings last
quarter.
 Wide range of financial products and focus on
premium traders.
 Strong private equity operations
 Emphasis on efficient execution of trade.
 Unstable dividend track record
 Bearish Stocks - Stocks with Medium to Low
Trendlyne Momentum Score
 Highly volatile share price over past 3 months
 Profit margins (9.8%) are lower than last year
(15%)
 Degrowth in Quarterly Revenue and Profit in
Recent Results
 Low Piotroski Score : Companies with weak
financials
 MACD crossed below signal line previous end of
the day.

5 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi

 OPPORTUNITIES THREATS

 Brokers upgraded recommendation or target  Stringent Economic measures by Government

price in the past three months (8.4% returns for and RBI
Nifty 500 over 0.3 years).
 Entry of foreign finance firms in Indian Market
 Street Favourite: High Analyst rating with at
 Companies with high market cap, lower public
least 20% upside (174.1% returns
shareholding
for over 5.4 years)
 Profit to loss companies.
 Growing rural market
 Degrowth in Revenue, Profit and Operation Profit
 Earning Urban Youth looking for investments
Margin in recent results (QoQ).

 Company with negative growth and promoters

decreasing shareholdings.

 Increased in Provisions in recent results

 Insiders sold stocks.

COMPETITORS ANALYSIS of MOTILAL OSWAL FINANCIAL SERVICES

6 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi

IIFL is perceived as one of Motilal Oswal's biggest rivals. IIFL was founded in 1995 in Mumbai, Maharashtra.
IIFL is in the Diversified Financial Services field. IIFL generates $106.4M less revenue than Motilal Oswal.

Sharekhan is Motilal Oswal's #2 rival. Sharekhan is a Private company that was founded in 2000 in Coimbatore,
Tamil Nadu. Sharekhan competes in the Application Software industry. Compared to Motilal Oswal, Sharekhan
has 2,251 more employees.

Angel Broking is one of Motilal Oswal's top competitors. Angel Broking's headquarters is in Mumbai,
Maharashtra, and was founded in 1987. Angel Broking operates in the Diversified Financial Services industry.
Angel Broking generates 33% of Motilal Oswal's revenue.

ICICI Securities provides institutional and retail broking, investment banking and wealth management services
to corporate and financial institutions.

ICICI Securities is a Public company. ICICI Securities's IPO date was on Apr 2018. Shilpa Kumar is the Managing
Director of ICICI Securities and has an approval rating of 69 from Owler members. ICICI Securities has received
a total of $263M in funding.

Kotak Securities offers online trading that focuses on stock recommendations, live share market and mobile
trading. It is one of the top competitors of Motilal oswal. Kotak Securities is a Private company. Kotak
Securities has a revenue of $165, and 22 employees.

AnandRathi offers wealth management, investment banking, corporate finance and advisory services.
AnandRathi's headquarters is located in Mumbai, Maharashtra. AnandRathi generates $102.7K in revenue per
employee
7 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi
Karvy is a share trading and stock broking firm that offers a wide range of financial products and services.
Karvy's headquarters is in Hyderabad, Andhra Pradesh. Karvy has a revenue of $71.9M, and 15,000
employees. Karvy's main competitors are Sharekhan, Motilal Oswal and Angel Broking.

Zerodha is a financial services company that offers brokerage-free equity investments, retail and institutional
broking and commodities trading. Zerodha is a Private company. Nithin Kamath is the Co-Founder & CEO of
Zerodha

Future Prospects of Motilal Oswal

Motilal Oswal Financial Services has a long way to go. For this, it needs to work on its weaknesses. It should
improve its financials. It has a high level of debt. Also, the proportion of Non-institutional Shareholders is very
low, i.e. 15.9%. MOFS should try to give a stable dividend to its shareholders. It can also expand its business in
the rural areas through its financial products. The Forecasted annual earnings growth of MOFS is 60.9% which
is quite impressive.

8 RESEARCH REPORT on MOTILAL OSWAL| by Anusha Mandloi