Motilal Oswal Financial Services shares drop nearly 6% as Q2 profit drops 68% YoY

Shares of Motilal Oswal Financial Services Limited (MOFSL) declined nearly 6% in early trade on Friday as investors reacted to its weak September quarter earnings. The sentiment was dented as the financial services company saw its consolidated net profit drop by 68% year-on-year (YoY) to ₹362 crore for the second quarter of FY26, compared to ₹1,120 crore in the same quarter last year.

Weighed down by Q2 earnings, MOFSL shares dropped as much as 5.76% to ₹966.25 on the BSE, while its market capitalisation slipped below ₹58,300 crore. Earlier today, the stock opened 3.93% lower at ₹985.05 against the previous closing price of ₹1,025.35.

The share price of MOFSL has fallen over 11% since October 28, after Sebi released a consultation paper proposing a reduction in brokerage fees - from 12 basis points to 2 basis points on cash market transactions, and from 5 basis points to 1 basis point on derivatives trades.

At the current level, the MOFSL share price is down 13.5% from its 52-week high of ₹1,097 touched on October 28, 2025, while the stock has nearly doubled from its 52-week low of ₹487.85 touched on April 7, 2025.

In the last one year, the financial services stock has risen 2.25%, while it surged 46% in the past six months and 7% in a month. The counter has lost over 1% in the calendar year 2025.

For the second quarter ended September 30, 2025, Motilal Oswal reported revenue from operations at ₹1,849 crore, down 35% from ₹2,841 crore in Q2 FY25.

During the quarter under review, total assets under management (AUM) jumped 46% YoY to ₹1.77 lakh crore, driven by strong mutual fund AUM growth of 57%. The private wealth management business also saw its AUM grow by 19% YoY to ₹1.87 lakh crore, on the back of new client additions and improved productivity.

In the wealth management business, PAT declined 24% to ₹170 crore. The cash volume market share was robust at 7.1%, and the F&O premium market share stood at 8.7%. The total blended ADTO market share stood at 8%. Distribution net flows grew 29% to ₹3,079 crore in the second quarter, and the distribution book grew at a 34% CAGR since FY21 to ₹40,544 crore in September 2025.

The PAT of the capital markets, according to Motilal Oswal, grew 24% year-on-year to ₹90 crore. Motilal Oswal said that it was ranked number one across IPOs, QIPs, and rights issues in the first half of the financial year.

The housing finance business saw PAT grow 27% to ₹34 crore. It reported disbursement growth of 48% year-on-year to ₹544 crore, and AUM grew 24% year-on-year to ₹5,236 crore. Its treasury book grew 14% year-on-year to ₹8,957 crore, and the treasury book delivered a healthy XIRR of 18.7% since inception, supported by a 42% CAGR driven by reinvestment of operating profits.

The company also announced the reconstitution of its Board of Directors with new appointments. Promoter group members Pratik Oswal and Vaibhav Agrawal have joined the board, while Joseph Conrad Agnelo D’Souza, a veteran from the HDFC Group, and Ashok Kumar P. Kothari, a senior Indian Revenue Service (IRS) officer, have been inducted as independent directors.

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