Motilal Oswal Financial Services has released its analysis of corporate earnings for the April-June quarter, describing them as modest but resilient. The brokerage firm's report highlights several key points about the current market scenario and future projections.

Q1 Earnings Overview

The aggregate earnings of companies in the Motilal Oswal Financial Services (MOFSL) Universe grew by 11% year-on-year, surpassing the estimated 9% rise. This performance marks the fifth consecutive quarter of single-digit net profit growth for the Nifty 50, which delivered an 8% growth against the estimated 5%.

Key Contributors to Earnings Growth

Five companies stood out as major contributors to the incremental earnings growth:

1. Bharti Airtel
2. Reliance Industries
3. State Bank of India (SBI)
4. HDFC Bank
5. ICICI Bank

These five companies collectively accounted for 77% of the incremental earnings growth in the Nifty 50.

Earnings Estimates and Market Performance

The brokerage's analysis revealed a balanced beat-miss ratio:

• 37% of companies exceeded profit estimates
• 36% of companies reported misses at the net profit level

Future Projections

Motilal Oswal projects a significant improvement in Nifty 50 EPS (Earnings Per Share) growth:

• FY25: 1% growth
• FY26: Expected to increase to around 9%

This projected increase is attributed to anticipated improvements in the macro environment, supported by fiscal and monetary measures.

Market Valuation

The Nifty 50 currently trades at 22.20x FY26E earnings, which is near its long-period average (LPA) of 20.70x.

Portfolio Strategy

Motilal Oswal's model portfolio maintains a strong large-cap bias:

The mid-cap allocation has been increased from 16% due to better earnings delivery in this segment.

Conclusion

While the April-June quarter earnings were modest, they demonstrated resilience and largely aligned with estimates. The projected increase in Nifty 50 EPS growth for FY26 suggests a positive outlook, supported by expected improvements in the macro environment. Investors may want to consider the balanced approach of Motilal Oswal's portfolio strategy, which maintains a significant large-cap presence while increasing exposure to mid-caps.

Motilal Oswal Financial Services (MOFSL) has reported a strong performance for the first quarter of fiscal year 2026, marking significant growth across various business segments and achieving multiple milestones.

Key Highlights

• Assets under advice grew by 28% year-on-year (YoY) to ₹6.5 lakh crores
• Customer base expanded to over 13.6 million, including 8.6 million+ mutual fund portfolios and 5 million+ broking accounts
• Annual recurring revenues reached 52% of net revenue
• Fee-based revenue contribution increased to 44% of total revenues
• Net worth rose 28% YoY to ₹12,537.00 crores, with Return on Equity (ROE) at 48% for Q1 FY26 (annualized)

Segment-wise Performance

Wealth Management

• Retail cash broking volumes (ADTO) stood at ₹3,179.00 crores, implying a 7.1% market share
• F&O premium market share at 7.9%
• Total ADTO market share at 7.5%
• Distribution book grew to ₹38,129.00 crores, up 34% compound annual growth rate (CAGR) since March 2021

Asset and Private Wealth Management

• Crossed ₹1.5 lakh crores equity Assets Under Management (AUM) milestone
• 92% of AUM outperformed benchmarks in the past 12 months
• Gross flows witnessed 59% YoY growth to ₹14,568.00 crores
• Added 14 lakh Systematic Investment Plans (SIPs) in Q1, with monthly SIP run rate crossing ₹1,200.00 crores in June

Capital Markets

• Investment banking business reported highest-ever quarterly revenues with 89% YoY growth
• Ranked 3rd in number of IPOs executed and 5th in terms of IPO value
• Completed 16 deals with a cumulative issue size of over ₹29,500.00 crores

Housing Finance

• AUM crossed ₹5,000.00 crores, up 22% YoY
• Disbursements grew 57% to nearly ₹400.00 crores
• Gross and net NPA at 1.2% and 0.6% respectively

Strategic Initiatives and Outlook

MOFSL launched its fifth private equity fund, targeting ₹8,000.00 crores, and completed 80% of the target fundraise in under two months. The company also announced the final close of its real estate Series VI fund.

Navin Agarwal, Group Managing Director, commented on the future outlook, stating, "We expect similar multiple over the next decade on the starting net worth due to the unique twin business model. The runway for growth is immense with strong double-digit growth expected in each of our businesses."

The company is focusing on strengthening its 5Ts: Technology, Talent, Training, Trust, and Thinking big. With market leaders in many of its businesses about 5-10 times MOFSL's profits and AUM, the company sees a strong growth runway ahead.

MOFSL's strategic focus on increasing the share of fee-based and trail-based revenues, driven by asset management, private wealth, distribution, and lending book growth, positions it well for sustained growth in the coming quarters.