Sector: Wealth Management Sector

Hi Friends,

Motilal Oswal Financial Services (MOFS) is a diversified financial company with multiple business segments. Understanding each of these segments is essential if we want to analyze the company’s potential for future growth.

This blog will help you understand how to approach a detailed review of MOFS, and in doing so, it will also prepare you to analyze similar companies like Nuvama, Jio Finance, etc. So please read this carefully, and if anything is unclear, feel free to drop your questions in the comments—I’ll respond to each one.

Table of Content

The Big Picture

MOFS broadly operates through two major business units (BUs):

Operating Business
Treasury Book

Operating Business

Within the Operating Business, there are four key segments:

Segment	Revenue Contribution	PAT Contribution	FY25 PAT Growth
(1) Wealth Management	45%	39%	28%
(2) Asset & Private Wealth Management (APWM)	37%	40%	36%
(3) Housing Finance	7%	7%	-2%
(4) Capital Markets	11%	14%	28%

Let’s walk through each of them to understand what they do and where the growth opportunities lie.

1) Wealth Management (WM)

This includes two primary services: Broking and Distribution.

a. Broking:

Think of this like Angel One’s core business—mainly focused on trading and F&O.
SEBI’s recent tightening on F&O impacted this segment significantly.
FY24: 47% of WM revenue came from broking.
FY25: Dropped to 40%.
Q4 FY25 vs Q4 FY24: Brokerage revenue down 37%.
This downturn likely contributed to MOFS stock price correction since Jan-25.

b. Distribution:

Focuses on selling services like equity/F&O trading, mutual funds, insurance, and commodities.
Growth here is powered by MOFS’s strong branch network and expanding RM (Relationship Manager) base.
FY25: 37% of WM revenue came from distribution (vs 34% in FY24).
This part of the business has been growing both sequentially and YoY.

2) Asset & Private Wealth Management (APWM)

This is MOFS’s fastest-growing and most profitable segment.

a. Services Offered:

80% from AMC (Mutual Funds), PMS (Portfolio Management), and AIF (Alternative Investment Funds)
10% from Private Equity funds for Ultra HNIs
10% from Real Estate funds for Ultra HNIs

b. Key Points:

APWM relies heavily on SIP flows and fund performance.
Bull markets help boost this segment; bear markets (like Apr/May 2025) cause a slowdown.
Rising interest in passive funds (ETFs, index funds) poses a challenge.
New entrants like Jio Finance, Zerodha, and GROWW increase competition.
Despite short-term declines, the long-term outlook remains positive with growing SIP culture in Tier 2/3 cities and villages.

This segment can be compared to peers like HDFC AMC, Nippon AMC.

3) Housing Finance

MOFS offers home loans, similar to Aptus and Aavas.

a. FY25 Performance:

Loan disbursement up 78% YoY.
AUM reached ₹4,878 crore, up 20%.
GNPAs at 0.8%, NNPAs at 0.4% (healthy asset quality).
Sales team grew 40%, now at 1,329 RMs.
However, PAT declined by 2%.

Since it contributes just 7% to overall business, this segment isn’t the key focus but shows signs of stabilization.

4) Capital Markets

a. Comprises:

Institutional Equities (research and recommendations for institutions)
Investment Banking (IPOs, QIPs, fundraising)
FY25: 37% topline growth, 31% PAT growth.
Performed well despite market volatility.

IPO/QIP slowdown may pose short-term headwinds.

Treasury Book

This unit manages the company’s surplus cash—invested in listed/unlisted equities, including MOFS’s own funds.

FY24 PAT: ₹1,084 crore
FY25 PAT: ₹478 crore (due to a ₹743 crore MTM loss in Q4)

Why the loss?

Investments are subject to Mark-to-Market (MTM) accounting.
Losses in Q4 were largely accounting losses due to market valuation drops—not necessarily “actual cash losses.”
With markets stabilizing, this could be the bottom for the treasury book.

Key Takeaways

Valuation: PE of 16 vs industry PE of 13 (elevated due to Q4 loss).
Volatility: High beta stock—can swing 6–10% easily.
Q4 FY25 was likely the worst quarter—Q1 FY26 might show improvement.
Risks: Market crashes and intensifying competition from Jio Finance, Zerodha, GROWW.
Opportunity: SIPs will likely grow in Tier 2/3 cities, supporting AMC business.

Note: Not a recommendation. This is purely educational.

Final Words

Understanding a company deeply—like we did here with MOFS—can give you a serious edge as an investor. This kind of breakdown is also how you should approach other players in the same space (like Nuvama, Jio Finance, etc.).

This took a lot of time and effort to put together, so if you found value in it, do share your thoughts in the comments or with your friends. Let’s keep learning and growing together as a community of smart investors!

Disclaimer:

I am NOT a SEBI-registered advisor or analyst.
This content is for educational purposes only and NOT a buy/sell recommendation.