Buy Motilal Oswal Financial Services; target of Rs 2200: Emkay Global Financial

Emkay Global Financial's research report on Motilal Oswal Financial Services

The MOFS stock has materially outperformed in the last one year, and maintained its strong run, with the share price up 12.5% in the last 1 week and up 30% since our coverage initiation last month (Refer to our note, Perfect vehicle to ride India’s wealth creation journey). The recent strong show by MOFS shares was largely endorsed by the value discovery across its business segments of Capital Markets, Asset Management, Wealth Management, and Affordable Housing Finance in the backdrop of the current re-rating seen in listed peers in these specific segments. This substantiates our argument given in the initiation note that MOFS value was going unnoticed due to its conglomerate structure and that its MOAT (reflected in its consistent book value compounding over 5-10-15 years) was not being aptly captured in its share price earlier.

Outlook

We maintain our positive view on the stock and reiterate our BUY rating, with revised Mar-25E TP of Rs2,200/share (from Rs2,000 earlier).