Why Did Motilal Oswal’s Profit and Margins Decline Sharply in Q2?
About the Company
Motilal Oswal Financial Services (MOFSL) is among India’s leading diversified financial services groups, offering broking, asset management, housing finance, and private equity. Known for its research-backed investing approach and client-centric services, the firm has a strong retail investor franchise and a growing AUM base. However, the recent quarter’s performance reflects volatility in capital markets and a sharp reduction in investment-related income.
Quarterly Performance Overview
Motilal Oswal reported a sharp YoY drop in revenue and profit due to a high base in the previous year, which benefited from significant investment gains. The decline in proprietary trading income and muted growth in the housing finance arm impacted profitability. Despite lower income, operating margins remained healthy, suggesting resilience in the core broking and asset management businesses.
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Q2 FY26 Financial Snapshot
| Metric | Q2 FY26 | Q2 FY25 | YoY Change |
|---|---|---|---|
| Revenue | ₹18.49 Bn | ₹28.40 Bn | ▼ 35% |
| EBITDA | ₹8.40 Bn | ₹18.10 Bn | ▼ 54% |
| EBITDA Margin | 45.42% | 63.92% | ▼ 18.5 bps |
| Net Profit | ₹3.62 Bn | ₹11.20 Bn | ▼ 68% |
Peer Comparison and Valuation Metrics
| Company | P/E (x) | ROE (%) | Debt/Equity |
|---|---|---|---|
| Motilal Oswal Financial | 18.2 | 14.1 | 0.28 |
| IIFL Finance | 17.8 | 13.5 | 1.03 |
| JM Financial | 16.5 | 11.4 | 0.52 |
SWOT Analysis
| Strengths | Weaknesses | Opportunities | Threats |
|---|---|---|---|
| Diverse revenue streams across broking, AMC, and lending. | Dependence on capital market cycles. | Strong growth potential in wealth management and PMS. | Volatility in proprietary book affecting profit visibility. |
Investment View
Despite a weak Q2, the structural fundamentals of Motilal Oswal remain sound with a strong retail client base and growing AUM. However, the near-term outlook remains muted due to lower trading volumes and subdued market sentiment. Long-term investors may accumulate gradually for a 2–3 year horizon, while short-term traders should wait for stabilization in earnings and broader market recovery.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, notes that while the quarterly weakness reflects market-linked earnings volatility, Motilal Oswal’s diversified structure offers downside protection. The business is expected to stabilize as capital markets normalize and loan disbursements improve.
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Related Queries on Motilal Oswal Q2 Earnings and Margin Outlook
- Why Did Motilal Oswal’s Profit Fall in Q2 FY26?
- How Is Margin Pressure Impacting Motilal Oswal’s Broking Business?
- Is Motilal Oswal a Long-Term Investment Opportunity?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
