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Equity Bottom-Up

Motilal Oswal Financial Services / Equity Bottom-Up

Motilal Oswal Financial Services (MOFS IN)

<ul><li><a href="https://www.smartkarma.com/entities/2023" target="_blank" data-smartkarma-citation="entities:2023:1">Motilal Oswal Financial Services Limited (MOFS IN)</a>’s affordable housing finance business- Aspire Home Finance- reports further deterioration in asset quality in 4QFY18. Overall slippages reach 6% of loan book in only its third year of operation.</li><li>The home loan book is unseasoned with more than 50% of the loans less than 2 years old. Company said asset quality will continue to deteriorate over 1HFY19 before stabilizing in 2HFY19.</li><li>Loan book declined QoQ for the first time, disbursements declined 40% YoY in FY18, costs are increasing and company reported losses for the first time in 4QFY18.</li><li>RBI’s recent report on Affordable Housing finance market noted that the segment is growing much faster than the overall home loan market and the segment has many-fold higher NPAs than the higher ticket segments. Aspire’s NNPA’s are the highest in the affordable housing category.</li></ul>

Motilal Oswal Financial Services Limited (MOFS IN)’s affordable housing finance business- Aspire Home Finance- reports further deterioration in asset quality in 4QFY18. Overall slippages reach 6% of loan book in only its third year of operation.The home loan book is unseasoned with more than 50% of the loans less than 2 years old. Company said asset quality will continue to deteriorate over 1HFY19 before stabilizing in 2HFY19.Loan book declined QoQ for the first time, disbursements declined 40% YoY in FY18, costs are increasing and company reported losses for the first time in 4QFY18.RBI’s recent report on Affordable Housing finance market noted that the segment is growing much faster than the overall home loan market and the segment has many-fold higher NPAs than the higher ticket segments. Aspire’s NNPA’s are the highest in the affordable housing category.

Motilal Oswal's Affordable Housing Finance Business Continues to Struggle