Depreciation increased 57% to Rs 9.35 crore, while provisions dipped 94% to Rs 10.87 crore. PBT moved up 1041% to Rs 195.22 crore. Effective tax rate stood at 13.8% in Q3FY2020. The final bottomline of the company moved up 318% to Rs 165.44 crore in the quarter ended December 2019.

Some of the key highlights for the 9MFY20 include 7% growth in AMC AUM, 8% growth in PE & RE AUM, 15% growth in Wealth AUM, 16% growth in Distribution business AUM, Positive net flows in MF for consecutive quarters amid moderate industry flows, Accelerated pace of new client addition in broking business, Superior quality of new book underwritten, Lower incremental credit cost, higher margins, Rating upgrade from CRISIL for MOHFL to AA- (Stable) from A+ earlier and MOHFL's NPA pool sale to ARC.

Consolidated net worth stood at Rs 3540 crore, net debt is Rs 4250 crore. Excluding Home finance, net debt is Rs 1360 crore and net of investments, we have a net cash balance sheet. RoE for 9M stands at 21%.

Book value of the company stood at Rs 234.77 per share at end December 2019.

Asset Management businesses (AMC, PE and PWM)

Asset Management business AUM across MF, PMS and AIF stood at Rs 40100 crore, +7% YoY. AMC ranks 12 by total equity assets; in PMS the company maintains leadership position. Revenues and PAT for the quarter stood at Rs 144 crore (+5% YoY) and Rs 41 crore (+22% YoY), respectively.

Equity MF AUM of Rs 21000 crore is just 1.9% of the Industry Equity AUM of Rs 10.8 lakh crore. The company has seen improvement in performance of several products. Several schemes rank top quartile in performance over 1 year and since inception. This has resulted in traction in gross as well as net flows.

Further, MOAMC has also launched Large and Mid-Cap fund under active category and also launched 4 index funds under passive category.

The share of Alternate assets, comprising of PMS and AIF, is the highest among AMC's at 47%.

Private Equity manages an AUM of Rs 6600 crore (+8% YoY) across 3 growth capital PE funds and 4 real estate funds. In 9MFY20, revenues grew by 9% YoY (ex-carry) at Rs 75.6 crore and PAT stood at Rs 17.6 crore. The 1st growth fund (IBEF 1) has delivered an XIRR of 27%. Strong performance and positioning has also aided new fund raise. We have launched IREF IV in FY19 and have achieved 3rd close at Rs 1110 crore.

Wealth Management business AUM grew by 15% YoY at Rs 18900 crore in 9MFY20 with net sales of Rs 740 crore. RM count of this business has reached 134. Trail revenues predominantly cover fixed costs. Investments in strong RM addition suppressed reported profitability. New MD and CEO has joined us with over 17 years of experience in Wealth Management Industry.

Overall Asset and Wealth Management revenues were Rs 570 crore in 9MFY20 and contributed 28% of consolidated revenues. Profits were Rs 146 crore and contributed 33% of consolidated profits.

Capital markets Businesses (Broking and Investment banking)

Capital markets comprises of Retail Broking, Institutional Equities and Investment Banking business. Revenues for this segment were Rs 897 crore in 9MFY20 and contributed 44% of consolidated revenues. Profits were Rs 138 crore in 9MFY20 and contributed 31% of consolidated PAT. Broking and distribution business profit stood at Rs 143 crore in 9MFY20 led by healthy volume growth and better operating leverage on the higher and linear revenues.

In Retail Broking and Distribution, Market share in high-yield cash segment has been improved. Overall market share improved to 2.6% (ex-prop) in Q3FY20.

Strategy is to bring in linearity through the trail-based distribution business is showing results. Distribution AUM was Rs 10400 crore, +16% YoY in Q3FY20. With only 16% of the 1.3 million client base tapped, we expect a continued increase in AUM and fee income as number of clients to whom we have cross sold and number of products per client cross sold rises.

In Institutional Broking, there was substantial improvement in rankings in ASIA MONEY POLL 2019 with 2nd Rank – Best Local Brokerage, 1st Rank - Best Overall Sales, 1st Rank – Best Sales Trading, 1st Rank – Best Corporate Access. This has been the result of focus driven differentiated research products with 250+ companies covering 21 sectors.

Investment Banking business continues to engage on a wide cross-section of mandated transactions across capital markets and advisory.

Housing finance business

Motilal Oswal Home Finance (MOHFL) reported profit of Rs 21.4 crore in 9MFY20 and Rs 16.1 crore in Q3FY20.

Margins have improved to 5.2% in 9MFY20, on account of improvement in yield and lower cost of funds.

Loan book stood at Rs 3800 crore as of 9MFY20. Disbursements in 9MFY20 were Rs 146 crore. New book sourced from April 2018 validates the new credit policy with 11 cases in NPA out of 4500 loan cases.

CRISIL has upgraded MOHFL's rating to AA- (stable outlook) from earlier A+ (stable). This will further benefit MOHFL in bringing down cost of funds and improve spreads.

Strong support from parent continues with total capital infusion to Rs 850 crore. Net Gearing stands at 3.4x.

Limited borrowing repayment for next 1 year, strong undrawn borrowing lines and ALM places us in comfortable liquidity situation.

Fund based investments

Fund based investments includes sponsor commitments to AMC and PE funds and strategic equity investments.

Fund based investments like commitments to asset management products. During 9MFY20 we have invested Rs 100 crore + in quoted equity investments.

Total quoted equity investment including unrealised gains was Rs 1660 crore as of Q3FY20. Cumulative XIRR of these investments is 18%.

Financial Performance 9MFY2020

For the nine-months ended December 2019 (9MFY2020), the company has reported 3% rise in total income at Rs 1868.55 crore. Interest expense fell 5% to Rs 367.10 crore, while other expenses rose 2% to Rs 903.79 crore. Ensuing Gross profit increased 11% to Rs 602.77 crore. Depreciation rose 60% to Rs 28.80 crore. PBT increased 165% to Rs 499.43 crore, as provisions declined 78% to Rs 74.54 crore in 9MFY2020. Effective tax rate stood at 11% in compared to 25%. The final bottomline of the company improved 196% to Rs 437.22 crore in 9MFY2020.