MOTILALOFS

Jan 28 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• DIVIDEND OF 5 RUPEES PER SHARE

Source text: [ID:]

Further company coverage: MOFS.NS

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Jan 1 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• MOTILAL OSWAL FINANCIAL SERVICES LTD - SEBI CONDUCTS THEMATIC INSPECTION OF CO

Source text: ID:nNSE7QlNHY

Further company coverage: MOFS.NS

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By Bharath Rajeswaran, Hritam Mukherjee and Shubham Batra

Nov 11 (Reuters) - Top Indian companies registered their worst quarterly showing in more than four years for the July-September period, raising concerns that a lurking economic slowdown had begun to affect corporate earnings.

More than 50% of the 44 firms in the blue-chip Nifty 50 index .NSEI that have reported earnings so far have either missed analysts' estimates or reported results in line with expectations, according to data compiled by LSEG.

This is their worst performance since the March 2020 quarter at the start of the COVID-19 pandemic, when only about 20% of the Nifty 50 companies beat estimates.

Curbed government spending in April-June, due to the national elections, that spilled over into the September quarter and above-normal rains impacted earnings outcomes, analysts at Jefferies and Bernstein said.

Indian equities have dropped about 8% from their record closing high notched on Sept. 26, with October marking the worst monthly performance for the stock market since March 2020.

The selloff was also exacerbated by foreign investors moving out their investments in the wake of China's recent stimulus.

"It appears the waters may get a bit turbulent for Indian equities in the near term," said Motilal Oswal.

According to Jefferies, the current season has had the highest earnings downgrades since April-June 2020 among the 121 companies under its coverage that have reported results so far.

Motilal Oswal, meanwhile, flagged an 8% decline in earnings growth for the 166 companies it covers - the worst in 17 quarters - compared to a pre-season estimated drop of 4%.

Bernstein, however, added that investors were still considering the weakness over the past several months as an anomaly due to an elongated period of strong growth.

"Once reality hits, we expect a further but limited moderation in the Nifty from current levels."

BLIP OR APPROACHING STORM?

The monsoon or election impact may only be a part of the problem, according to Bernstein, "with a broader economic slowdown seen across IIP, eight core industries, automobile demand or diesel consumption."

Construction firms UltraTech Cement ULTC.NS and Larsen & Toubro LART.NS flagged weak demand, while banks reeled under their inability to recover unsecured loans. FMCG giants Nestle India NEST.NS and Hindustan Unilever HLL.NS also noted dull urban consumption.

Factory growth slowed to an eight-month low in September, while economic growth slowed to 6.7% in April-June. Data for July-September will be released on Nov. 30.

Bernstein moderated its year-on-year growth expectations for September earnings to 0.6% for the top 100 stocks, from its previous 9% forecast, while retaining its full-year consensus earnings growth of 10.2%.

Venkatesh Balasubramaniam, managing director and co-head of research at JM Financial, said one quarter of earnings weakness was not enough to indicate an economic slowdown, saying it was "too soon" to make that call.

"There is a possibility that government capex picks up in the second half."

Jefferies, which also noted the earnings moderation as a reflection of a cyclical slowdown, said that things could pick up in the second half of fiscal 2025.

Government spending on capex has fallen 15% in the first half, it said. With weather disruptions behind, execution and spending will rise by 25% in the second half, supporting an earnings rebound and a bounce-back in markets, it said.

(Reporting by Shubham Batra, Bharath Rajeswaran and Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman)

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** Shares of Motilal Oswal Financial Services MOFS.NS surge 8.1% to 944 rupees

** Co's Q2 consol profit after tax more than doubles to 11.22 bln rupees ($133.5 mln)

** Total rev from ops up 71% Y/Y

** Stock eyes busiest trading day in five sessions, over 3.5 mln shares traded

** MOFS snaps two straight sessions of losses

** Stock up ~202% YTD

($1 = 84.0480 Indian rupees)

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

** Shares of Motilal Oswal Financial Services MOFS.NS jump as much as 10.5% to record high of 913.45 rupees; currently up 7.9%

** Overall, 8 mln shares traded, 5.6x 30-day avg

** Reuters could not immediately ascertain the reason behind day's move

** Relative strength index (RSI) rises to 77.4, suggesting stock might be overbought - LSEG data

** MOFS up ~191% YTD

(Reporting by Vijay Malkar)

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Corrects spelling of Zerodha co-founder's name in paragraph 9

Oct 3 (Reuters) - Shares of most Indian brokerages settled lower on Thursday after the markets regulator tightened rules for derivatives trading, while an escalating Middle East conflict weighed on broader markets.

The Securities and Exchange Board of India (SEBI) on Tuesday raised the entry barrier and made it more costly to trade in equity derivatives. The changes will be effective from Nov. 20.

SEBI had first proposed tightening derivatives trading in July.

Online trading platforms Aditya Birla Money ABML.NS and SMC Global Securities SMCG.NS fell the most, dropping 3.7% and 3.8%, respectively. They were flat earlier in the session.

Discount broker 5Paisa Capital PAIS.NS, which rose 3.8% earlier in the day, ended down 2.7%.

The benchmark Nifty 50 .NSEI and S&P BSE Sensex .BSESN posted their worst sessions since early August as the widening Middle East conflict dented risk appetite. .BO

Discount broker Angel One ANGO.NS, was the lone gainer, closing 5.5% higher in a choppy session after analysts at Investec raised the price target on the stock to 3,000 rupees, the second-highest on the Street.

Exchange operator BSE's BSEL.NS shares closed up 2.5% after briefly rising nearly 10%. BSE, which has smaller exposure to the derivatives segment, would be affected less by the new rules than the National Stock Exchange of India, Motilal Oswal said in a note.

SEBI's new rules would hurt 60% of all futures and options trades and 30% of overall trades, Nithin Kamath, co-founder of India's largest brokerage Zerodha, said in a post on X, adding that Zerodha would decide on pricing changes on Nov. 20.

Indian authorities have been flagging concerns about the unchecked explosion of retail investor trading in derivatives and the possibility that it could create challenges for the markets, investor sentiment and household finances.

A SEBI study published last month showed that only 7.2% of individual Indian traders made a profit in futures and options in the three years to March 2024.

($1 = 83.9330 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Mrigank Dhaniwala and Eileen Soreng)

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Sept 24 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• MOTILAL OSWAL FINANCIAL SERVICES- TO BUY GLEITEN TECH FOR 5 MILLION RUPEES

Source text for Eikon: [ID:]

Further company coverage: MOFS.NS

(([email protected];))

Aug 19 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• TO ISSUE NON-CONVERTIBLE DEBENTURES WORTH UP TO 1 BILLION RUPEES

• GREENSHOE OPTION FOR ISSUE OF NCDS WORTH 1 BILLION RUPEES

Further company coverage: MOFS.NS

(([email protected];))

Aug 13 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• TO CONSIDER FUND RAISING

Source text for Eikon: ID:nBSE3GbZzK

Further company coverage: MOFS.NS

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Repeats story published on July 19 with no changes to text

By Bharath Rajeswaran

BENGALURU, July 19 (Reuters) - India unveils its budget on July 23 in the first major policy announcement of Prime Minister Narendra Modi's third five-year term, which could usher in changes to economic priorities.

After a shock election result saw Modi's party returned to power relying on allies, the government is expected to boost consumption in Asia's third-largest economy by lowering personal taxes or increasing spending on consumer-focused areas.

While that could benefit consumer goods makers, real estate and housing finance firms as well as infrastructure and auto companies, some sectors could also stand to lose, said brokerages.

Here are some of their winners and losers.

RURAL-LINKED SECTORS

The government is expected to allocate more funds for rural schemes to stimulate consumption, aiding consumer goods makers like Hindustan Unilever HLL.NS and two-wheeler makers like TVS Motor TVSM.NS and Hero MotoCorp HROM.NS, according to Citi.

A less than 5%-7% increase in tobacco taxes could be a positive for ITC ITC.NS, the country's largest cigarette maker, according to Jefferies.

REAL ESTATE

The government is likely to allocate more funds for affordable housing, benefitting developers such as Macrotech Developers MACE.NS and Sunteck Realty SUNT.NS, Citi said.

Moreover, the introduction of an interest subsidy scheme for urban housing would boost financiers like Aavas Financiers AVAS.NS and Home First Finance HOME.NS, said Jefferies.

AUTOMAKERS

India doled out subsidies worth 115 billion rupees ($1.38 billion) over five years to drive the adoption of electric vehicles (EVs) and Macquarie expects the government to retain both the quantum and tenure in its latest scheme.

That could benefit Tata Motors TAMO.NS, India's top e-car maker, as well as IPO-bound e-scooter maker Ola Electric and e-bus makers Olectra Greentech OLEC.NS and JBM Auto JBMA.NS.

Conversely, lesser-than-expected EV subsidies could benefit Maruti Suzuki MRTI.NS, India's highest-selling car maker and one that has chosen to make hybrid cars over pure EVs.

MANUFACTURING

The push on production-linked incentive schemes, which incentivises local manufacturing and creates jobs, is expected to continue, according to HSBC.

That will help manufacturers of technology hardware, telecom equipment, electronics and medical devices among others, like Dixon Technologies DIXO.NS, Ideaforge Technology IDEF.NS, Biocon BION.NS.

Capital goods companies like Larsen & Toubro LART.NS and infrastructure firms could benefit from the likely rise in capital expenditure in the budget, according to Jefferies.

TRADING

Any change in capital gains tax -- either by raising the holding period or tax rate -- could be a dampener for equities, Morgan Stanley said, though it says such moves are unlikely.

But, if enacted, they would increase the tax burden on equity and mutual fund investors, eroding the tax advantage they enjoy over investors in other asset classes.

It could also lead to lower trading volumes, weighing on brokerages Motilal Oswal MOFS.NS, ICICI Securities ICCI.NS, Angel One ANGO.NS, 5 Paisa PAIS.NS among others.

The country's mutual fund association has petitioned that mutual fund units be exempted from long-term capital gains tax.

The government and regulators also want to rein derivatives trading -- which has largely powered the stock market's rally since the COVID-19 pandemic -- calling it risky and speculative.

Any move to do so, such as through higher taxes, will not only weigh on the market but also reduce trading volumes and in turn, affect brokerages and trading platforms, Jefferies said.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza)

(([email protected]; +91 9769003463;))

By Bharath Rajeswaran

BENGALURU, July 19 (Reuters) - India unveils its budget on July 23 in the first major policy announcement of Prime Minister Narendra Modi's third five-year term, which could usher in changes to economic priorities.

After a shock election result saw Modi's party returned to power relying on allies, the government is expected to boost consumption in Asia's third-largest economy by lowering personal taxes or increasing spending on consumer-focused areas.

While that could benefit consumer goods makers, real estate and housing finance firms as well as infrastructure and auto companies, some sectors could also stand to lose, said brokerages.

Here are some of their winners and losers.

RURAL-LINKED SECTORS

The government is expected to allocate more funds for rural schemes to stimulate consumption, aiding consumer goods makers like Hindustan Unilever HLL.NS and two-wheeler makers like TVS Motor TVSM.NS and Hero MotoCorp HROM.NS, according to Citi.

A less than 5%-7% increase in tobacco taxes could be a positive for ITC ITC.NS, the country's largest cigarette maker, according to Jefferies.

REAL ESTATE

The government is likely to allocate more funds for affordable housing, benefitting developers such as Macrotech Developers MACE.NS and Sunteck Realty SUNT.NS, Citi said.

Moreover, the introduction of an interest subsidy scheme for urban housing would boost financiers like Aavas Financiers AVAS.NS and Home First Finance HOME.NS, said Jefferies.

AUTOMAKERS

India doled out subsidies worth 115 billion rupees ($1.38 billion) over five years to drive the adoption of electric vehicles (EVs) and Macquarie expects the government to retain both the quantum and tenure in its latest scheme.

That could benefit Tata Motors TAMO.NS, India's top e-car maker, as well as IPO-bound e-scooter maker Ola Electric and e-bus makers Olectra Greentech OLEC.NS and JBM Auto JBMA.NS.

Conversely, lesser-than-expected EV subsidies could benefit Maruti Suzuki MRTI.NS, India's highest-selling car maker and one that has chosen to make hybrid cars over pure EVs.

MANUFACTURING

The push on production-linked incentive schemes, which incentivises local manufacturing and creates jobs, is expected to continue, according to HSBC.

That will help manufacturers of technology hardware, telecom equipment, electronics and medical devices among others, like Dixon Technologies DIXO.NS, Ideaforge Technology IDEF.NS, Biocon BION.NS.

Capital goods companies like Larsen & Toubro LART.NS and infrastructure firms could benefit from the likely rise in capital expenditure in the budget, according to Jefferies.

TRADING

Any change in capital gains tax -- either by raising the holding period or tax rate -- could be a dampener for equities, Morgan Stanley said, though it says such moves are unlikely.

But, if enacted, they would increase the tax burden on equity and mutual fund investors, eroding the tax advantage they enjoy over investors in other asset classes.

It could also lead to lower trading volumes, weighing on brokerages Motilal Oswal MOFS.NS, ICICI Securities ICCI.NS, Angel One ANGO.NS, 5 Paisa PAIS.NS among others.

The country's mutual fund association has petitioned that mutual fund units be exempted from long-term capital gains tax.

The government and regulators also want to rein derivatives trading -- which has largely powered the stock market's rally since the COVID-19 pandemic -- calling it risky and speculative.

Any move to do so, such as through higher taxes, will not only weigh on the market but also reduce trading volumes and in turn, affect brokerages and trading platforms, Jefferies said.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Savio D'Souza)

(([email protected]; +91 9769003463;))

Rewrites with Zerodha comments; updates share prices

BENGALURU, July 2 (Reuters) - Zerodha, India's largest discount broker, said on Tuesday it will in all likelihood have to abandon its zero-brokerage model and raise derivative trading fees after the market regulator mandated uniform charges that are not based on volumes.

Exchanges often charge a lower fee to brokers if they generate high volumes. Brokers, in turn, charge traders little to no fees, which has contributed to a surge in trading across segments like derivatives that the Securities and Exchange Board of India (SEBI) wants to curb.

The new fee structure, which kicks in from October, has a significant impact on brokers, traders and investors, Nithin Kamath, CEO and co-founder of Zerodha, said on social media platform X.

"With the new circular, we will, in all likelihood, have to let go of the zero brokerage structure and/or increase brokerage for F&O trades," he said, referring to futures and options, which are derivative products in the stock market.

"Brokers across the industry will also have to tweak their pricing."

Shares of listed brokerages Angel One ANGO.NS, SMC Global Securities SMCG.NS, Motilal Oswal MOFS.NS, Geojit Financial GEOJ.NS and Dolat Algotech DOLA.NS fell between 3% and 8% on Tuesday.

5Paisa Capital PAIS.NS ended flat, while exchange operator BSE BSEL.NS dropped about 3.5%.

Some of these stocks have jumped 50%-124% so far this year due to a surge in trading activity, with the blue-chip Nifty 50 .NSEI and S&P BSE Sensex .BSESN indexes trading at all-time highs.

The exchange transaction charge, which constitute between 15%-30% of large brokers' revenues and more than 50% of discount brokers', is crucial for their sustainability, said Tejas Khoday, CEO and co-founder of discount broking firm FYERS.

"A 100% pass-through of exchange transaction charges threatens to destabilise the discount brokerage business model," Khoday said.

The revenue impact on Zerodha could be 10%, and 10%-50% for the industry, Kamath estimated.

The SEBI had warned of rising risks due to a surge in derivative trading. Regulators were discussing steps to cool the frenzy, Reuters reported last month.

(Reporting by Jayshree P Upadhyay and Sethuraman NR in Bengaluru; Editing by Mrigank Dhaniwala and Savio D'Souza)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

By Bharath Rajeswaran

BENGALURU, May 27 (Reuters) - Indian Prime Minister Narendra Modi returning to power for a rare third consecutive term will boost shares of defence, infrastructure, railway and capital goods companies, the head of brokerage Motilal Oswal Financial Services said.

"These were areas where the government has focussed on, invested money. High probability that the ruling government will continue. If they return... they'll go (with) much more vigor," Raamdeo Agrawal, chairman and co-founder of the brokerage, said on Saturday.

"In the next 5 years, you'll see major action from the government, powering these sectors."

India's weeks-long general elections end on Saturday, with the ballots set to be counted on June 4.

Narendra Modi's ruling Bharatiya Janata Party (BJP) is expected to return to power, according to opinion polls, although low voter turnout has led to some concerns about the margin of victory.

Analysts see a shock defeat for Modi as an unlikely event, but fear a market correction - like one witnessed two decades ago - in the event of an 'unclear' mandate.

India's benchmark Nifty 50 .NSEI had slumped 17% in two sessions after the 2004 election results, when the then ruling BJP-led coalition lost, despite being tipped to retain power.

In his two terms, Modi has focussed on improving India's ramshackle infrastructure and boosting domestic manufacturing, including in the defence sector. The government has proposed a record infrastructure spending of $133 billion in the financial year 2025.

Shares of top defence, infrastructure and capital goods companies have risen between 64% and 480% over the last 12 months, outperforming the Nifty 50's one-fourth rise.

"If, for whatever reason, there is no clear mandate to the ruling party, then it's scary. The correction will be pretty sharp because the expectation built for policy continuity is very high," Motilal Oswal's Agrawal said.

Any changes to the country's capital gains tax regime in the post-election budget could also hurt the market, he said.

"The issue of capital gains tax tweaks is definitely there on the table. The government has not denied it. It is a major unknown," Agrawal said.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Mrigank Dhaniwala)

(([email protected]; +91 9769003463;))

** Shares of Motilal Oswal Financial Services MOFS.NS climb nearly 9% to 2,678.10 rupees after March-qtr results

** MOFS says qtrly consol profit surges over four-fold to 7.23 bln rupees ($86.76 mln)

** Stock set to advance for third straight session, if levels hold

** More than 1.2 mln shares trade in stock's most active session since late Jan

** Stock more than doubled YTD vs Nifty financial services index's .NIFTYFIN 0.7% decline

($1 = 83.3316 Indian rupees)

(Reporting by Rama Venkat in Bengaluru)

(([email protected]; https://twitter.com/ramavenkat0607;))

MUMBAI, April 23 (Reuters) - India's Motilal Oswal Financial Services plans to raise up to 10 billion rupees ($120 million), including a greenshoe of 5 billion rupees, through its maiden public issue of bonds, three bankers said on Tuesday.

The issue opened for subscription on Tuesday and will close on May 7, they said.

The financial services company is offering bonds maturing in 24 months, 36 months, 60 months and 120 months at annual coupon rates of 8.85%, 9.10%, 9.35% and 9.70%, respectively.

Around 75% of the proceeds will be used to meet working capital requirements and repay existing liabilities, with the balance to be used for general corporate purposes, bankers said.

CRISIL and India Ratings have rated the bonds "AA".

The company has allotted 40% of the issue size each for high networth individuals and retail investors, and 10% each for institutional and non-institutional investors.

Trust Investment Advisors, Nuvama Wealth Management and Motilal Oswal Investment Advisors are the lead managers for this issue.

($1 = 83.3322 Indian rupees)

(Reporting by Bhakti Tambe; Editing by Mrigank Dhaniwala)

(([email protected]))

** Motilal Oswal Financial Services MOFS.NS jumps 9.8% to record high of 2,074.30

** Reuters could not immediately ascertain the reason for the move

** Stock trading above its 50, 100 and 200-day moving averages

** MOFS' fwd 12-month P/E is 15x, below industry avg of 16x and rival Angel One's ANGO.NS 19x, per Jefferies

** Indian wealth managers are well-placed to ride on country's economic growth & financialization of savings into capital mkts, where MOFS get 60% rev, Jefferies says

** MOFS up 63% YTD vs 18.4% drop in ANGO and 26.4% drop in IIFL Finance IIFL.NS

(Reporting by Sethuraman NR in Bengaluru)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))

Feb 19 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• MOTILAL OSWAL FINANCIAL SERVICES- LAST WEEK, CO DETECTED A CYBER-INCIDENT IN FORM OF SOME MALICIOUS ACTIVITY ON A FEW EMPLOYEES' PCS

• MOTILAL OSWAL- ACTIVATED CYBERSECURITY INCIDENT RESPONSE PROCESS TO INVESTIGATE, CONTAIN, REMEDIATE INCIDENT IN AN HOUR

• MOTILAL OSWAL- INCIDENT HAS NOT AFFECTED ANY OF BUSINESS OPERATIONS AND IT ENVIRONMENT

• MOTILAL OSWAL- ENGAGED CONSULTANTS TO GO THROUGH SYSTEMS, CONFIDENT ABOUT IT SECURITY

(([email protected];))

** Shares of Motilal Oswal Financial Services MOFS.NS up 1.2% after strong Q3 results, trading at record high levels

** MOFS on track for fourth straight month of gains, and also best month since May 2014 with ~40% gains so far

** Co reports Q3 consolidated net profit more than doubled YoY to 6.60 bln rupees ($79.4 mln); interest income rose 45.1%

** More than 672,000 shares changed hands by 12:05 p.m. IST, 1.5x 30-day avg

** Stock hit an all-time high of 1,860.60 rupees and posted a record close of 1,712.32 rupees on Wednesday

($1 = 83.1100 Indian rupees)

(Reporting by Navamya Ganesh Acharya in Bengaluru)

(([email protected]; +91 8805175330 ;))

Jan 24 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• DIVIDEND 14 RUPEES PER SHARE

• APPROVED ISSUANCE OF NON-CONVERTIBLE DEBENTURES NOT EXCEEDING 30 BILLION RUPEES

Further company coverage: MOFS.NS

(([email protected];))

Nov 1 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• INDIA'S MOTILAL OSWAL FINANCIAL SERVICES SEPT-QUARTER CONSOL NET PROFIT 5.31 BILLION RUPEES VERSUS PROFIT 5.09 BILLION RUPEES

• MOTILAL OSWAL FINANCIAL SERVICES SEPT-QUARTER CONSOL TOTAL REVENUE FROM OPERATIONS 16.39 BILLION RUPEES VERSUS 13.21 BILLION RUPEES

Source text for Eikon: ID:nBSE7czXcF

Further company coverage: MOFS.NS

(([email protected];))

Sept 1 (Reuters) - Gufic Biosciences Ltd GUFI.NS:

• TO ISSUE SHARES TO MOTILAL OSWAL FINANCIAL SERVICES ON A PREFERENTIAL BASIS

• SHARE ISSUE WORTH 999.9 MILLION RUPEES

• ISSUE PRICE 300 RUPEES PER SHARE

Further company coverage: GUFI.NS

(([email protected];))

** Shares of India's Motilal Oswal Financial Services MOFS.NS up as much as 8.8% at 889.95 rupees - highest since May 6

** Financial services co's June-qtr profit rose to 5.27 bln rupees ($64.1 million) from 312.6 mln rupees, rev rose about 2x

** About 1.3 mln shares changed hands by 1:43 p.m. IST, 6.6x 30-day avg

** Co sees busiest day since Nov 9, 2021

** Including session's gains, stock has risen ~22% YTD

($1 = 82.2808 Indian rupees)

(Reporting by Hritam Mukherjee in Bengaluru)

(([email protected];))

July 27 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• APPROVED SCHEME OF ARRANGEMENT

• APPROVED ARRANGEMENT BETWEEN CO, GLIDE TECH INVESTMENT ADVISORY, MOTILAL OSWAL WEALTH

• PROPOSED ARRANGEMENT INVOLVES TRANSFER OF B&D UNDERTAKING INTO GLIDE BY WAY OF SLUMP SALE

• PROPOSED ARRANGEMENT INVOLVES DEMERGER OF WEALTH BUSINESS UNDERTAKING OF MOWL INTO MOFSL

• APPROVED SALE OF IDENTIFIED INVESTMENTS FROM ITS INVESTMENTS PORTFOLIO TO GLIDE

Source text for Eikon: ID:nBSE4Wyth8

Further company coverage: MOFS.NS

(([email protected];))

By Bharath Rajeswaran

BENGALURU, June 21 (Reuters) - A roaring rally in mid- and small-cap stocks listed on Indian bourses could see abrupt corrections, as many of them trade at near or record highs even though overall consumption demand remains sluggish, at least six analysts said.

The Nifty mid-cap 100 index .NIFMDCP100 has hit fresh all-time highs in each of the previous seven sessions, gaining 19% so far in fiscal year 2024, while the small-cap index .NIFSMCP100 touched new 52-week highs over the last seven sessions and added 20% year to date.

In contrast, the benchmark BSE Sensex and the NSE Nifty have gained 7.7% and 8.6% in the same period, respectively.

"The sharp rally in mid and small caps seem to be bordering on euphoria as consumption demand remains sluggish and valuations have reached unrealistic levels in most cases," analysts at Kotak Institutional Equities wrote on Monday.

Growth in the Indian economy is seen slowing to 6.5% in the current financial year compared to 7.2% last year. In the Jan-March quarter - the latest data available - private consumption grew just 2.8% even as government spending boosted the broader economy. Weaker demand could weigh on company earnings.

Others warned of erratic monsoons, which can impact India's largely agriculture-based economy.

"Nothing is cheap right now, so investors have to be very, very selective on midcaps," said Avinash Gorakshakar, head - research at Profitmart Securities. "If monsoon is not as per expectations, we could witness a temporary halt in the rally."

The 12-month forward price-to-earnings ratio - a metric that measures valuation of an index or security - of the mid-cap index .NIFMDCP100 stood at 24.1 on June 20, while the Nifty 50's .NSEI P/E ratio was 21.9. The P/E ratio for the small-cap index .NIFSMCP100 was just below at 19.6.

The P/E ratio of midcap index has risen from 23.5 at the start of the year to 24.02 in June while the P/E ratio of smallcap index rose from 16.39 in January to 19.6, amid the rally in markets.

Most mid-cap stocks are also trading well above their pre-Covid multiples.

DOMESTIC DEMAND

A strong inflow of funds from domestic investors has been instrumental in pushing up valuations.

Since January 2022, mid-cap equity-oriented schemes and small-cap schemes saw inflows of 286 billion rupees ($3.49 billion) and 318.91 billion rupees respectively, twice as much as the 143.45 billion rupees invested into large-cap schemes, data from the Association for Mutual Funds in India showed.

The interest in this set of stocks has prompted fund house Motilal Oswal to launch India's first-ever micro-cap index fund for investors looking beyond the Nifty 500 firms for hidden opportunities.

"Large caps can absorb that much of liquidity, but when midcaps start attracting that kind of flow, then it becomes difficult to absorb liquidity and valuations will get re-rated," said Hemant Kanawala, head - equity investments, Kotak Life Insurance.

One 97 Communications PAYT.NS, Aurobindo Pharma ARBN.NS, PB Fintech PBFI.NS have been among the top mid-cap performers in 2023, adding over 40%.

To be sure, not everyone is skeptical about the recent rally.

"Post the correction in global equities in 2022, the rally in Indian markets has been more broad-based and has trickled down to midcaps," said Atul Suri, chief executive officer at Marathon Trends Advisory.

Suri expects the rally in broader markets to continue, led by the revival in the industrial cycle. He identified inflation as the major lingering risk to the Indian market rally.

($1 = 81.9878 Indian rupees)

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)

(([email protected]; +91 9769003463;))

** Shares of domestic brokerage firm Motilal Oswal Financial Services Ltd MOFS.NS fall 4.59% to 598.50 rupees

** MOFS reports consolidated net profit nearly halved to 1.65 bln rupees in March quarter from 3 bln rupees YoY on rise in total expenses

** Consolidated revenue from operations also fell marginally to 10.27 bln rupees compared to 10.51 bln rupees YoY

** MOFS declares final dividend of 3 rupees per share; taking total dividend to 10 rupees per share for FY2023

** Trading volume is 92,784 shares as of 11:58 a.m. IST, 0.9x the 30-day avg of 98,655 shares - Refinitiv data

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463))

April 27 (Reuters) - Motilal Oswal Financial Services Ltd MOFS.NS:

• MARCH-QUARTER CONSOL NET PROFIT 1.65 BILLION RUPEES VERSUS 3 BILLION RUPEES

• MARCH-QUARTER CONSOL TOTAL REVENUE FROM OPERATIONS 10.27 BILLION VERSUS 10.51 BILLION RUPEES

Further company coverage: MOFS.NS

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