Motilal Oswal Financial Services Ltd shares declined over 4% on Friday to trade near ₹976 after the company posted a sharp decline in quarterly profit and the market continued reacting to SEBI’s draft proposal to cap mutual fund brokerage fees. The stock opened weaker and extended losses amid investor concerns over earnings pressure and regulatory headwinds.
Q2 earnings slump 68% YoY
Motilal Oswal reported a 68% year-on-year fall in consolidated net profit to ₹362 crore for Q2 FY26, compared to ₹1,120 crore in the same quarter last year.
Revenue from operations also declined 35% to ₹1,849 crore from ₹2,841 crore in Q2 FY25.
The earnings decline follows a moderation in capital markets activity and higher base in the year-ago quarter.
AUM growth remains strong despite profit drop
Despite softer profitability, Motilal Oswal reported strong growth in assets under management (AUM).
Total AUM rose 46% year-on-year to ₹1.77 lakh crore, supported by a sharp 57% YoY rise in Mutual Fund AUM.
The company’s Private Wealth Management division also continued to show resilience, with AUM rising 19% YoY to ₹1.87 lakh crore, aided by new client onboarding and stronger advisory productivity.
Board changes announced
Motilal Oswal also announced key appointments to its Board of Directors. Pratik Oswal and Vaibhav Agrawal from the promoter group have joined the board.
Additionally, Joseph Conrad Agnelo D’Souza, a veteran from HDFC Group, and Ashok Kumar P. Kothari, a senior IRS officer, have been inducted as independent directors.
SEBI’s draft fee limits add pressure
Investor sentiment has been weak since October 29 after SEBI released draft proposals to reduce brokerage fees paid by mutual funds.
The new guidelines suggest cutting fees on cash market transactions to 2 basis points from 12 bps, and on derivatives to 1 basis point from 5 bps, which could impact brokerage profitability across the industry.
Stock update
Shares of Motilal Oswal Financial Services were trading at ₹975.60, down 4.85% around 9:25 AM on Friday. The stock has traded between ₹965.30 and ₹993.60 so far in the session. With a market cap of ₹614.87 billion, the stock has seen heightened volatility post earnings and regulatory developments.
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