MOTILALOFS Q2 FY27 Earnings Call: PAT Rises 29% on Wealth Engine, Wins First Non-Bank Custodian License

MOTILALOFS held its Q2 FY27 earnings call on October 29, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

ARR-Led Profit Growth; Asset & Private Wealth Now the Core Engine

• Q2 FY 2026-2027 PAT of Rs.718cr, +29% YoY — led by asset & private wealth (+43% YoY); these businesses now contribute 58% of operating profit vs 49% in FY 2025-2026 and 42% in FY 2024-2025, with management expecting this share to keep rising (period unspecified).
• ARR revenues at 66% of group revenues — up from 55% in FY 2023-2024; asset & private wealth PAT +44% YoY at 57% of group PAT in H1 FY 2026-2027 (vs 39% in FY 2023-2024).
• Non-broking revenue share within wealth management at 65% in H1 FY 2026-2027 vs 53% in FY 2023-2024 — a structural de-risking of the franchise from broking cyclicality.
• Decadal record of 33% compounded growth in operating businesses — with a 26% EPS CAGR, decade-average ROE of 23%, and 41% decadal CAGR in the investment book; no equity dilution since the 2007 listing, consistent dividends and three buybacks.
• Group ranked among top 161 listed players by trailing 12-month PAT (vs 345 ten years ago) and 175 by market cap (vs 285); management sees the next decade offering scope to improve these rankings further.

AMC at Rs.2.23 Lakh Cr AUM; Alternates Carry Income Begins to Accrue

• Asset management contributed 43% of group OPAT in Q2 FY 2026-2027 vs 31% in Q2 FY 2025-2026; average AUM rose from Rs.1.67 lakh cr (March 2026) to Rs.2.01 lakh cr (September 2026), 28% above the Rs.1.57 lakh cr FY 2025-2026 average.
• 99% of AUM beat respective benchmarks over the past 3 years (as of 30 September 2026); 24 schemes crossed Rs.1,000cr AUM vs 16 in FY 2025-2026; funds with >3-year vintage seen rising from 6 to 8 by March 2027 (FY 2026-2027) and 16 by March 2028 (FY 2027-2028).
• Q2 SIP flows of Rs.4,170cr at 4.4% market share — SIP AUM Rs.42,000cr; ~Rs.18,000cr annualized SIP run-rate; 2,400+ distributors each contributing >Rs.1cr gross flows over the last 12 months; unique investors >1 crore, 1 in 6 of the mutual fund industry.
• Q2 net flows a tad higher than Q1 FY 2026-2027 — active Rs.3,400cr, passive Rs.1,600cr, monthly SIP run-rate over Rs.1,400cr; flows had moderated over the last few quarters from a very strong FY 2025-2026 trend.
• Carry income of Rs.108cr booked in Q2 FY 2026-2027 — variable returns rose from ~Rs.65cr to Rs.110-115cr as select alternate funds met recognition criteria; accruals currently come largely from two mature schemes, with significant headroom to scale as fund vintages expand (growth period unspecified). Management called this stream more predictable than ARR income.
• Private credit fund raise crossed the 90% threshold — pipeline exceeds the remaining 10%; closure was not declared with the Q2 FY 2026-2027 call as the pipeline is being held back for some domestic institutional flows. Maiden commercial offices real estate fund (fourth alternates offering) launched, with closure expected over the next 6 months; next product launches potentially slated for calendar year 2027.
• Management sees alternates at a similar stage of evolution as the mutual fund business 10-15 years ago — "the number of product offerings set to keep rising every year," supported by rising allocation to alternates by Indian institutions and family offices within overall equity allocations.

Market Share Recovers Sequentially; Private Wealth Ramping Through RM Vintage

• Retail broking market share incl. commodities at 7.9% in Q2 FY 2026-2027 — F&O premium share up from 7.6% to 8.8% QoQ and cash share from 6.8% to 8% QoQ; largest non-bank broker by cash-segment revenue share. Management attributes the cash gain mainly to MTF book growth and the options gain to its practice of advising clients to trade options safely, which tends to do better when overall market volumes are lower.
• Management believes regulatory-change and flat-market headwinds are in the base and expects growth to improve going forward (period unspecified).
• Private wealth Q2 ARR revenue of Rs.180cr — net flows +65% QoQ to Rs.6,357cr; AUM +58% YoY to Rs.2.96 lakh cr; Q2 PAT +2% YoY on a high Q2 FY 2025-2026 base (3-/5-year PAT growth 25%/29%); management expects H2 FY 2026-2027 PAT growth to be much higher than H1.
• 443 RMs, only 33% with >3-year vintage — within the sub-3-year cohort, ~15% are less than 1 year vintage, the cohort that has not yet broken even (as of Q2 FY 2026-2027). RMs typically break even within a year of hiring and become organizationally profitable within 2-3 years (general pattern; period unspecified). Hiring continues "more judiciously," with a large share of FY 2026-2027 additions focused on the ultra-HNI segment.

Rs.18,000 Cr Lending Book Led by MTF; Housing Asset Quality Improving

• Group lending book of ~Rs.18,000cr in Q2 FY 2026-2027 — MTF ~Rs.9,000-9,500cr, housing finance ~Rs.6,500cr, loan against shares ~Rs.3,000cr; bulk of growth from MTF, with housing finance up ~25% (period unspecified). A ~Rs.4,500cr bank guarantee financing book (client collaterals substituted into bank guarantee financing) explains the divergence between lending AUM and the MTF/LAS components.
• PWN lending book grew ~90% over the trailing four quarters (through Q2 FY 2026-2027) — management attributed the bulk of this growth to the MTF book for HNI/UHNI clients, largely in line with how cash volume growth has played out in the market; the loan-against-shares portion is growing at a normal rate of ~20-25% a year (period unspecified).
• Housing finance disbursements +29% YoY to Rs.701cr; AUM +24% YoY to Rs.6,476cr — management expects similar growth over the coming 3 years (FY 2027-2028 through FY 2029-2030); high capital adequacy/low leverage mean no external equity dependency.
• Housing finance 1+, 30+ and 90+ delinquency pools all down YoY and lower than H1 FY26 levels; management expects further improvement in H2 FY 2026-2027 (H2 seasonally carries the bulk of recoveries), with GNPA expected to normalize around 1.1-1.2%.
• Treasury book +27% YoY to Rs.11,346cr (41% CAGR since March 2014) — almost 98% equity with no debt allocation as of Q2 FY 2026-2027; within equity, ~55% in AMC funds, ~20% in alternate funds, and the remaining ~25% (stated as 20-23%) in direct equity.
• Insurance revenue exposure quantified — ~3% of wealth management operating revenues (predominantly life insurance) and ~7% of housing finance business revenues as of Q2 FY 2026-2027. Goldman Sachs' Deepanjan Ghosh flagged potential impact from the proposed consultation paper; management quantified exposure but did not address the consultation paper impact in its response.

Custodian License Won; SIF Launch Slated for Q4 FY27

• SEBI granted a custodian license in Q2 FY 2026-2027 — the first non-bank custodian license in over a decade; CEO and senior management hired; operations to commence in Q4 FY 2026-2027, subject to completion of operational readiness.
• Custodian product strategy guidance expected ~Q1 FY 2027-2028 — the team has just come in place and the product offering is still being formulated; management said it is "very tough to comment" on scale-up over the next two years and ARR accretiveness (transaction fees plus AUC-linked custodian fees); the business is not expected to contribute anything even in FY 2027-2028 (year ending March 2028).
• SIF launch expected in the January-March quarter (Q4 FY 2026-2027) — part of new avenues alongside pension entry, outbound GIFT City funds and wider hybrid presence.
• Commodity brokerage yields fell sharply over Q1-Q2 FY 2026-2027 — management attributed the slight Q2 market share impact to discount brokers launching commodities divisions in a big way and elevated crude/gold volumes, and expects the trend to recover very fast (period unspecified).

Flow Traction and ARR Mix to Drive H2 FY27

• September (Q2 FY 2026-2027) delivered Rs.2,400cr of net active MF inflows after a 2-3 month lean period; management expects over Rs.2,000cr net active inflows in October (Q3 FY 2026-2027); with funds delivering ~6% alpha in Q2 FY 2026-2027, management believes flow traction should continue.
• Several large MF schemes cross three-year vintage over the next six to seven months — small cap (the single largest inflow category) in December (Q3 FY 2026-2027), followed by large cap and multi-cap over the subsequent three-month periods; distributors typically require a minimum three years of performance before allocating monies. Active product basket stands at 24 funds; future launches are not expected to be large drivers of net sales.
• Stepped-up investments in people, brand and technology over the past couple of years are expected to bear fruit in the coming years via market share gains and profitability improvement (period unspecified).
• Management flags resilient SIP flows from Indian investors and the rising ARR share as key drivers for H2 FY 2026-2027, similar to Q2 FY 2026-2027 delivery.
• PWM transaction AUM rose QoQ in Q2 FY 2026-2027 — driven by custody asset growth (onboarding of large promoter accounts transferring their own shareholding into Demat accounts) plus MTF-led growth in broking assets; new customers contribute ~20% of overall net flows (period unspecified), a share management said is steadily increasing.