Buy Motilal Oswal Financial Services; target of Rs 703: ICICI Securities

ICICI Securities is bullish on Motilal Oswal Financial Services has recommended buy rating on the stock with a target price of Rs 703 in its research report dated August 08, 2024.

Broker Research

August 09, 2024 / 14:51 IST

Buy

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ICICI Securitie's research report on Motilal Oswal Financial Services

MOSL has started transitioning from broking and distribution business towards wealth management with strategic objectives of enhancing client relationships, building deeper and more meaningful connections that position MOSL as trusted advisors and offering comprehensive financial solutions that extend beyond broking and align with clients' aspirations for wealth creation and reservation. As per management, investors today are more informed and seek more than just transactional services. Investors now demand personalised investment advice that considers their long-term financial goals. This shift in investor and consumer behaviour signifies MOSL’s move towards deeper engagement in financial planning, which includes diverse asset classes and effective risk management. The transition to wealth management is not just a change in nomenclature, but a strategic evolution for the company.

Outlook

We maintain BUY for MOSL with a revised TP of INR 703 (earlier INR 395 [adjusted for 1:4 bonus]) based on FY26E SoTP-based valuations basis multiples of 15x/28x/28x/15x P/E on a two-year-forward PAT for capital markets (IB+IE)/(AMC+PE)/PWM/wealth management and a 1.2x two-year forward P/B for the HFC segment. We value treasury AUM on a 1x-basis as on date (same as in past). Our change in target price from INR 395 to INR 703 includes the impact of capital charge now included in segmental revenue which was earlier part of treasury segment income.

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