Target: ₹1,597

CMP: ₹1.329.15

Motilal Oswal Financial Services (MOSL) has maintained a strategy of riding on the structural trend in financialisation over the years. The phygital strategy bodes well considering the franchise strength and the possible premiumisation opportunities.

Our constructive stance on the stock has been based on individual growth levers in all business segments (market share improvement in broking, improved fund performance in AMC, increase in RM efficiency in wealth management, traction in PE and improving RoE in affordable housing business) at attractive valuations.

We assign 1.2x P/B for capital market/affordable housing lending business. We have increased the multiples of broking business to 15x driven by steady market share performance and continued momentum in capital market space. We have also increased the multiple of PE business to 15x basis the potential long-term value in the segment

The stock has given around 82 per cent returns over the last year and we expect the tailwinds to continue, considering the capital market momentum in the near term; long-term structural tailwinds remain intact.