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Motilal Oswal Financial Services Q2-FY09 Results Highlights

The highlight of MOFSL’s Q2 results is the continued focus on reducing the share of broking income in the revenue mix.

Broking revenues have a strong correlation with stock market movements, and are seen as volatile.

On a y-o-y basis, consolidated revenues and profits fell 11% and 17% respectively primarily led by fall in brokerage income (down 27%) and other income (down 38%).

The downside was however restricted on account of higher contribution from non-broking revenues (30.7% of total revenues) compared to 13.0% (y-o-y).

Consolidated revenues were sequentially down by 4% and profits up 3%. EBITDA margins expanded 50 bps on account of higher contribution of better margin, non-broking businesses. Fund-based income was the only segment that reported growth on both y-o-y and q-o-q basis.

The stock trades at 5.4x FY09 and 4.6x FY10 earnings.