MOTILALOFS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.2

• 📈 Revenue Growth: Quarterly PAT dropped sharply from ₹532 Cr to ₹194 Cr (-67.2%), showing earnings pressure
• 💰 Profit Margins: Moderate, ROE at 21.4% and ROCE at 17.8%
• ⚖️ Debt Ratio: Debt-to-equity at 1.16, relatively high leverage
• 💵 Cash Flows: EPS of ₹16.8, modest relative to valuation
• 📊 ROE/ROCE: Reasonable efficiency, but impacted by profit decline
• 📉 Valuation: P/E 51.3 vs Industry PE 20.7, significantly overvalued
• 📚 Book Value: ₹135, P/B ~6.37
• 📈 PEG Ratio: 2.03, indicates stretched valuation relative to growth
• 🏢 Business Model: Diversified financial services group with focus on asset management, broking, wealth management, and housing finance
• 🛡️ Competitive Advantage: Strong brand in wealth management and asset management, diversified revenue streams

Positive

• ✅ Strong ROE (21.4%) and ROCE (17.8%)
• ✅ Diversified business model across financial services
• ✅ Institutional support with FII (+0.23%) and DII (+0.40%) inflows
• ✅ Technical support near DMA 200 (₹873)

Limitation

• ⚠️ Quarterly PAT dropped sharply (-67.2%)
• ⚠️ High P/E ratio (51.3) compared to industry average (20.7)
• ⚠️ PEG ratio at 2.03 indicates stretched valuation
• ⚠️ Debt-to-equity at 1.16, leverage risk

Company Negative News

• 📉 Significant profit decline in latest quarter
• 📉 High leverage compared to peers

Company Positive News

• 🌍 Expansion in asset management and wealth advisory services
• 💡 Institutional investor confidence with FII/DII inflows

Industry

• 💹 Industry PE at 20.7, Motilal Oswal trades at a steep premium
• 📈 Financial services sector supported by rising retail participation and wealth management demand

Conclusion

Motilal Oswal shows moderate fundamentals with strong ROE and diversified business presence, but valuations are stretched with high P/E and PEG ratios. Profitability has weakened significantly, and leverage adds risk. Entry zone is attractive only near ₹800–850 (close to DMA 200 support). Long-term holding is favorable only if earnings stabilize and growth in asset management and wealth advisory segments accelerates.

Would you like me to extend this into a peer benchmarking overlay comparing Motilal Oswal with IIFL Wealth and Edelweiss, or should we run a sector rotation scan to identify stronger compounding opportunities across financial services and asset management plays?