Motilal Oswal Navigates Q2FY26 with Record Operating PAT and Strategic Expansion

Motilal Oswal Financial Services Limited (MOFSL) has reported a robust performance for Q2 and H1 FY26, showcasing its resilience and strategic prowess in a dynamic financial landscape. The company achieved its highest-ever Operating Profit After Tax (PAT) in H1 FY26, underscoring the effectiveness of its diversified business model and disciplined execution. For Q2 FY26, the operating PAT grew by 2% to ₹554 crore, primarily propelled by significant growth in the Asset and Private Wealth Management (PWM) businesses, which collectively saw a 36% year-on-year increase. This marks the fourth consecutive quarter of strong growth for these key segments.

The company's 'twin-engine' business model, comprising asset-light operating businesses and a robust treasury investment book, continues to be a cornerstone of its success. This model enables MOFSL to generate substantial free cash flows from its operating segments, which are then strategically reinvested into the treasury. The treasury book has demonstrated remarkable growth, expanding 55 times since inception and delivering a healthy XIRR of 18.7%. This self-sustaining capital allocation strategy has allowed MOFSL to fund its growth initiatives without the need for external capital raises since its IPO in 2007, a rare feat in the Indian financial services sector. The company's net worth has also seen impressive growth, increasing nearly tenfold from March 2015 to September 2025, reflecting strong compounding over the decade.

Segmental Performance Highlights

The Asset and Private Wealth Management business has been a significant growth driver. The Asset Management Company (AMC) continued its momentum, with net flows in Q2FY26 increasing by 56% YoY to ₹20,011 crore. The AMC's Assets Under Management (AUM) stood at ₹1.6 lakh crore as of September 30, 2025, marking a 46% YoY increase. The company's MF AUM market share reached an all-time high of 2.6%, with a strong net sales market share of 8.2% and SIP flow market share of 4.8%. In Alternates, MOFSL successfully completed the first close of its fifth Private Equity fund, IBEF V, raising ₹6,900 crore towards a target of ₹8,350 crore, nearly doubling the last fund raise.

The Private Wealth Management business also demonstrated robust growth, with net sales increasing threefold in Q2FY26 to ₹7,358 crore, bringing the total AUM to ₹1.87 lakh crore. The Capital Market business, encompassing Institutional Equities and Investment Banking, had another strong quarter. The Investment Banking division successfully executed 39 deals in H1FY26 with a cumulative issue size of approximately ₹49,000 crore, securing the #1 rank in IPO, QIP, and Rights Issue league tables by number of issues. The Housing Finance business continued its growth trajectory, with disbursements increasing by 48% YoY to ₹544 crore, driven by a 50% YoY increase in its Sales Relationship Manager (RM) force.

Strategic Outlook and Future Growth

MOFSL is optimistic about India's economic trajectory, with the country's GDP expected to grow from $3.7 trillion to an estimated$30 trillion by 2047. This growth, coupled with the financialization and equitization of a rapidly expanding savings pool (projected to reach USD 126 trillion by 2047), is expected to provide significant tailwinds across all its businesses. The company sees substantial headroom to gain market share against leaders in its key businesses, who are currently 5-10 times larger in terms of profits or AUM.

Management is focused on enhancing productivity and margins, particularly in Private Wealth Management, by strengthening product capabilities, targeting Ultra High Net Worth (UHNI) and Family Offices, and expanding its presence in Tier 2 cities. The company is also investing in future-ready technology infrastructure to power its growth, including AI-driven fraud detection tools and comprehensive digital onboarding solutions. The recent upgrade of its long-term credit rating to AA+ (Stable) by ICRA, the highest for a non-bank domestic capital market player, further solidifies its financial standing and improves access to institutional capital.

Motilal Oswal's Q2 FY26 performance reflects a company with strategic clarity, robust execution, and a strong financial foundation. The management's focus on sustainable, fee-based revenue streams, diversified business segments, and proactive risk management positions it well to capitalize on India's long-term growth story. The company remains committed to its 'Think Equity, Think Motilal Oswal' philosophy, aiming to be a dominant player across all major alternate AMC segments and continue its compounding journey.