Motilal Oswal Financial Services

(Growth_without Debt) #62

If inflow to MF reduces, govt / SEBI pressurize to reduce expense ration on MF, what will be impact on profitability of wealth management companies like MOFS?

(Dr Manoj) #63

In the long run, I am quite optimistic about this stock. The particular reasons for this optimism are leadership of Raamdeo Agrawal,past good returns,skin in the game. Even the portfolio of Motilal Oswal mutual funds have selected few quality stocks.showing a blend of consistent performers & emerging companies.

(Julian) #64

Why Raamdeo Agarwal handed over all his equity investments to Motilal Oswal.

(JKS) #65

I was a tad confused by the wording on trading closure note…does it mean, Q4 result was supposed to be yday? (9th April)…don’t see the result so far

(shreys) #66

The results weren’t today.
Their trading window closed from 9th April onwards.

(Julian) #67

Thanks for clarifying Shreys. Was trying to contact Motilal Oswal today for getting clarification on their notification sent to BSE. Considering last year’s practice, results are expected by the end of the month.
Expecting blockbuster results, considering that they have the best PMS and mutual funds. This is their durable competitive advantage over an Edelweiss or a Piramal.
Disclosure: Invested

(Balusu Aditya) #68

Why would you expect blockbuster results given that the last quarter saw the markets crash so magnificiently?

(Julian) #69

What’s the connection between blockbuster results and markets crashing? I only said blockbuster results, not blockbuster share price. Read the management interview for the past two quarters and the performance since last year. Basant Maheswari has called it a 10 year story. Let’s hope for a 5 year story atleast.


Do not count on BM. For Can Fin he said we are still at Borivali(Mumbai) and we have to reach Delhi. His journey on the long road he terminated at the start only and not even mid-way.

(shreys) #71

In my opinion, the connection possibly being that market meltdown discourages people from transacting. And, broking is an important division of Motilal Oswal which might see a deterioration in performance.

(Julian) #73

Even market crashes lead to more transactions, as more people come to sell and bargain buyers too enter. I certainly did not transact less the previous quarter. We are still at Borivali said Rakesh Jhunjhunwala. I still believe it is a bull market correction. The best is yet to come.

(shreys) #74

Broking companies or companies perceived as broking companies despite having diversified business interests have been victims of negative market sentiment since a long time. Even post the bull run that culminated in 2008 broking companies lost as much as 75% of their market capitalisation in less than 60 days.
And, some numbers pertaining to volumes during negative market sentiment.
Cash trading segment volume:
December 2007- 19000 crores
January 2008- 11000 crores
Volumes almost halved.

Derivatives market volumes:
December 2007-67000 crores
January 2008-43000 crores
And, these lower volumes weren’t mere aberrations.

In 2000, post the massive bull run volumes had decreased significantly.
In March 2000:
Cash segment volumes on NSE- 5000 crores
In March 2002:
Cash segment volumes on NSE- 2300 crores
A drop of more than 50%.
And, this uncertainty in the earnings is probably being discounted by the market.
Sure, Motilal Oswal is a very well diversified business. But, it’s still categorised in the broking space.
And, regarding the longevity of this bull run, I feel that it’s hard to tell. Nasty developments spring when they’re least expected.

(Yatharth) #75

LTCG Tax may help broking. In any case, as you said, this is a well diversified business. Think for 5 years. Will India remain a bear market? Anyways, different opinions make the market.

Discl : Invested, 18 months back, high allocation, good returns so far.

(shreys) #76

@Yatharth Sir,
It’s entirely possible that imposition of LTCG will support Motilal Oswal’s business activities.
Also, I agree that bear markets won’t last for a very long period.
However, it’s pertinent to note that market capitalization erosion suffered during market downfall can take years to recoup.
In the run up to market peak in 2008 Motilal Oswal established new highs frequently.
However, during market meltdown it was battered tremendously. And, it couldn’t surpass those levels for 7 long years.
Few people can survive such a tumultuous period where the invested amount is destroyed by more than 50%.
Motilal Oswal of 2018 is indeed very different than Motilal Oswal of 2008. The company today is diversifying and derisking. But, from the little I know- bear markets are more often than not accompanied by a slowdown in the economy. And, if the economy struggles I’m of the view that housing finance will also be an unremarkable performer. And, over the past decade India has become an increasingly integrated economy. Our economy was relatively unscathed in the 2008 slowdown. But,today, after 10 years, I think that tremors of a slowdown in any major economy will be felt by us as well. Integration with global economies is a double edged sword.
So, post a bearish market, indices may recover well but broking companies or companies involved in capital market activities often suffer from the negative sentiment developed during the bear run.
Also, in my humble opinion, broking and merchant banking are sectors as cyclical as they can possibly be.
In my limited understanding it may be a better idea to invest in such companies when we’re in bear territory and exit when there’s optimism. But, easier said than done.

(us121) #77

Capital Market is largely for eternal optimistic, certainly over long term. Financial Sector is growth engine for same. I repeat words… For long run.

Rest remains is finding wheat from chaff. Which is absolute essential for this industry due to very nature of it.

Once having done so, it is a waiting for reasonable opportune time. Key word is reasonable… Bottom fishing is generally not possible due to temperamental issues with many, hence better to understand our limitations.

History rhymes BUT doesn’t repeat. Hence better not to make it a dead baggage. Our past needs to be also seen through the glass of what has happened in countries who are decade or two ahead of us in development. Such multi dimensional thinking may help mould right lessons from history.

Discl: i hv no position in this stock. Hold good position in Edelweiss, Gruh n Manappuram in NBFC.

(vipinsays) #80

Both ramdeo n motilal have reduced holding when stock was @ 1100 can be checked from value research

(yudiagg) #81

I can not see that. Pl share link to supporting documents.

(yudiagg) #82

PL check BSE site. There is no reduction in the total combined holding of
all the owners.

(Hersh Kapadia) #83

Promoters have been offloading marginal stake every quarter since last 2 years irrespective of price. Maybe its for diversification purpose as they jointly own 70% in the entity

(vipinsays) #84

There is some change or something wrong in value research ,where it is showing that both have acquired holding in march 18. which is wrong, This can be confirmed from link below where it says that insider trading 6-9 months back column