Motilal Oswal Financial Services shares dropped 8% on Friday even though the company returned to profit in the first quarter.
The stock was trading at Rs 868 apiece on the National Stock Exchange after losing over 72.7 points from its previous close at Rs 940.25.
The company reported a consolidated net profit of Rs 1,273 crore for the quarter, compared with a loss of Rs 221.3 crore in the preceding quarter.
Total income rose 27% sequentially to Rs 3,432 crore from Rs 2,695 crore in the previous quarter.
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Annuity Revenues Strengthen Business Mix
The company said its focus on building annuity revenues continued to improve the quality and predictability of its business.
Annuity revenues contributed 66% to the overall revenue mix during the quarter, according to the company's press release. The higher share of recurring income provides greater visibility to revenues across market cycles.
“Focus on annuity revenues has led to a contribution of 66%, improving quality and predictability of business,” the company stated in its exchange filing.
Motilal Oswal Financial Services also reported strong growth in assets under management. Total AUM increased 31% year-on-year to Rs 2.12 lakh crore, reflecting expansion across its asset and wealth management businesses.
Motilal Oswal Financial Services Share Price
Despite returning to profit in the June quarter, Motilal Oswal Financial Services failed to impress investors, with its shares falling 8% on Friday.
The selloff came even as the company reported sequential growth in total income and swung back into the black after a loss in the previous quarter.
The stock has now fallen over 7% in the past month, reflecting continued pressure despite the earnings recovery.
Analysts are likely to watch whether the company's earnings momentum can be sustained, with growth in assets under management (AUM) and recurring revenue expected to remain key drivers in the coming quarters.
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