Motilal Oswal Home Finance Limited recently disclosed its Q3 FY24 and nine-month earnings report, showcasing robust financial performance amid a dynamic market landscape. The company achieved a commendable profit of INR 97.8 crores in the first three quarters of the fiscal year, demonstrating resilience and strategic maneuvers.

Q3 Financial Performance

During Q3, the Net Interest Income (NII) grew by 6% Year over Year (YoY), reaching INR 233.9 crores, with the Net Interest Margin (NIM) standing at 7.7%. These figures underscore the company’s ability to navigate market challenges effectively.

Asset Quality and Disbursements

As of December 2023, the company reported an Asset Under Management (AUM) of INR 3,780 crores. Disbursements in Q3 FY24 amounted to INR 247 crores, marking a notable 22.2% YoY increase, with the retail disbursement segment witnessing a substantial 50% YoY growth to INR 178 crores.

The yield on advances in Q3 reached 14.2%, up by 40 basis points YoY, while maintaining a spread of 5.9%, reflecting the company’s commitment to optimizing its lending operations.

While the Cost to Income ratio for 9M FY24 saw a slight increase to 43.1%, the strategic hiring of Sales Relationship Managers (RM) is significant as the company targets an IPO market listing in the near future.

The Net Gearing ratio stood at 2.0x in Q3, down from the previous year’s 2.2x, indicating prudent financial management. With a robust Capital to Risk-Weighted Assets Ratio (CRAR) of 47.5%, the company maintains a strong capital adequacy position.

Motilal Oswal Home Finance’s creditworthiness was reaffirmed by major rating agencies, holding a stable AA rating. Operating across 111 locations in 12 states, the company has expanded its reach and increased the number of relationship managers to 856.

Strategic Initiatives

The company aims to enhance productivity by improving Turnaround Time (TAT) and Approval ratios. With new leadership across senior management, the groundwork has been laid for a significant ramp-up in disbursements and AUM growth.

In a strategic move towards digitalization, Motilal Oswal Home Finance has revamped its sales and lead management processes, leveraging geotagging and geo-fencing capabilities for fully digital sales operations. The adoption of an end-to-end paperless approval process and an 85% e-signature rate for loan documents underscores the company’s commitment to efficiency and customer-centricity.