Motilal Oswal Financial Services Ltd
NSE:MOTILALOFS
Motilal Oswal Financial Services Ltd
NSE:MOTILALOFS
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Good morning, ladies and gentlemen. I'm Faizan, the moderator for this conference. Welcome to the Q2 FY 2022 and H1 FY 2022 Earnings Conference Call of Motilal Oswal Financial Services Limited.We have with us today Mr. Raamdeo Agrawal, Chairman; Mr. Navin Agarwal, Director and AMC CEO; Mr. Ajay Menon, CEO, Broking and Distribution; Mr. Arvind Hali, CEO, Housing Finance; Mr. Shalibhadra Shah, Chief Financial Officer; Mr. Rakesh Shinde, Investor Relations.[Operator Instructions] I would now like to invite Mr. Navin Agarwal to make his opening remarks. Thank you, and over to you sir.
Thank you. Good morning, everybody, and welcome to the Motilal Oswal con call for the second quarter and the half year ended September 30. We hope that all of you and your families are safe and in good health. For the second quarter, we have reported a profit after tax of INR 5.4 billion, up by 81% year-on-year. Our profit excluding gains on investments stood at INR 2.7 billion, up by 118% year-on-year. This is the highest ever quarterly operating profit reported by the company.For the first half, we've reported a profit after tax of INR 7.6 billion, that is up 63% excluding the gains on investments, this number is INR 4 billion, up by 76%, once again the highest ever half yearly operating profits reported by us. The core business was robust with capital market profits at up by 52% Y-o-Y and 55% quarter-on-quarter and the asset and wealth business profits up by 226% Y-o-Y, led by a 44% growth in the asset management business profits, 88% growth in the wealth business profits and a 12x growth in the private equity business profits, driven by profit on exit of one of our investments.Consolidated net worth touched an all-time high and stood at INR 51.7 billion. Our net debt was at INR 40.5 billion. Excluding home finance debt, we are a net cash company net of our equity investments, return on equity for the company for the first half stood at 37%. We're also very happy to inform you that during this half year, we've seen positives from all the 3 rating agencies in terms of upgrades. India Ratings has assigned us a AA rating and its subsidiaries, including home finance subsidiary. CRISIL Ratings has upgraded outlook on the group to positive AA-minus rating, and ICRA Ratings has upgraded our housing finance subsidiary to a AA-minus with a stable outlook rating.In terms of the key highlights for the quarter and the half, our capital market business continues to report robust growth rate up by 44% Y-o-Y and 19% quarter-on-quarter in terms of revenues. There's continued traction in clients addition. There's 96% growth in the average daily turnover with mix favoring high-yielding cash delivery volumes. There's strong growth in active clients, traction in the distribution business. We continue to make meaningful investments in augmenting our manpower and talent pool as well as our distribution network and benefit from the consolidation that is ongoing in the broking business, where the top 10 players are becoming a larger share of the overall market.The asset management business, we witnessed lifetime high market, which in turn took up the AUM to its highest ever. Our mutual fund gross sales and SIPs gained traction. And in AIF, we are receiving very encouraging response. IREF our Real Estate Fund Series 4 has achieved its second close at INR 8.1 billion. We also -- we've also launched our largest ever private equity growth fund. The India Business Excellence Fund Series 4, with a target to collect INR 4,000 crores. We have received a very overwhelming response to this fund launch, and we expect the first close in a matter of a few days from now with more than half the funds getting raised right at the time of the first close.Returning to the Home Finance business, we witnessed a very strong pickup in disbursements. We are seeing traction in our login and sanction pipeline and we are looking at a meaningful expansion in our sales force in the second half to ramp up our disbursements on a quarter-on-quarter basis over the coming quarters. We've also witnessed a fairly sharp reduction in our cost of funds that in turn drove our margins for this business. Further with the series of rating upgrades that I talked about, we believe that our cost of funds have more room to fall, and we should benefit from a reasonably strong liability franchise that the group enjoys.Doing a deep dive into individual businesses, starting with the capital markets business. This business comprises of retail broking, institutional equities and investment banking business. Revenues from this segment were at INR 6.1 billion during the quarter, up by 44% year-on-year. The capital market business has contributed 48% of the consolidated revenues. Our profit for this business grew by 52% year-on-year, 55% quarter-on-quarter at INR 1.2 billion. And for the half, the profits are at INR 2 billion, again, a very, very healthy growth.In the retail broking and distribution business, we witnessed strong traction in new client addition driven by our franchisee channel as well as our retail channel. Total 440,000 our clients got acquired in the first half of the year, which is up by 114% year-on-year. The NSE active clients have also registered a growth of 62% year-on-year at 7.2 720,000 clients as of September of 2021. Our distribution AUM within the retail broking business stood at nearly INR 160 billion, up by 43% year-on-year with 13% of our 2.4 million broking clients tagged for a cross-sell, and we expect continued increase in this AUM and fee income as a number of clients to whom we cross-sell and the number of products that we cross-sell to them continues to rise.Within the institutional broking business, we saw strong improvement in domestic rankings with top 3 ranks we came in most of the clients. This has been a result of focus, differentiated research products, coverage of 250-plus companies across 21 sectors. In the investment banking business, we participate in 3 IPOs and 1 OFS. Further, there's a strong pipeline of signed mandate, which will start getting launched in the markets from the second half. As a result, the revenue traction in the coming quarters is expected to be stronger than the first half of this year.Turning to the Asset & Wealth Management business. Our AUM across mutual funds, PMS and AIF stood at a tad lower than INR 500 billion at INR 496 billion, by 32% year-on-year. Profits for the quarter stood at INR 417 million, up by 44% year-on-year and was at INR 773 million for the first half up by 46% year-on-year. Our equity mutual fund AUM of INR 300 billion is 1.5% of the industry equity AUM of INR 20 trillion. We have seen improvement in the performance of several of our products. Our gross and net sales started improving and redemptions declined on a quarter-on-quarter basis.We've had a favorable response towards alternate offerings under the AIS strategy and expect continued flows in the AIS strategies which are launched and are in the pipeline right now. Our share of alternate assets is at 38%, which is on the highest among the asset management companies. During the first half, we added 220,000 SIPs up by 62% year-on-year. New SIP count market share for us in the first half stood at 1.7%. Our private equity business has committed investment AUM of INR 69 billion across the 3 growth capital, private equity funds and the 5 real estate funds.In the second quarter, our revenues and profits grew very strongly on the back of exit of one of our investments, G R Infra and we reported a profit of INR 827 million on that exit. Due to that, the profit after tax grew 12x to INR 1.5 billion. The first growth fund that we recently closed, delivered an IRR of -- ex-IRR of 26% plus. Our average IRR on exited investments across all our real estate funds stands at over 21%. The Fifth Series Real Estate Fund achieved a second close at INR 8.1 billion and as I said earlier, the private equity fund launched its Fourth India Business Excellence Series fund target to raise INR 40 billion, likely to raise more than half of that in the coming weeks when we do the first close of this fund.Turning to the Wealth Management business, AUM of this business also grew strongly, stood at INR 315 billion as of September, up by 57% year-on-year. Revenues for the business stood at INR 476 million, up by 36% year-on-year, led by strong sales of nearly INR 20 billion. Yields improved by 7 basis points to 63 basis points during the quarter. The RM count for the business stood at 122, sales revenues predominantly cover our fixed costs. Strong operating leverage is visible led by improvement in RM productivity. However, we continue to invest in the business and are looking to meaningfully ramp up the RM count, relationship manager count in the coming quarters and years.Overall, the Asset & Wealth Management business revenue stood at INR 3.46 billion, up by 94% during the quarter, stood at INR 5.5 billion, up by 70% in the first half. Asset and Wealth Management businesses now contribute 23% of the consolidated revenues and the profits are at INR 1.44 billion, up by 226% year-on-year -- in the second quarter and at about INR 2 billion during the first half, up by 170% and account for 25% of the overall consolidated profits of the group. Turning to the Home Finance business. We reported a profit of INR 201 million during the second quarter and INR 285 million in the first half, which is up by 70% year-on-year.Our NII grew by 16% year-on-year and NIM expanded to 6.9% in the first half of the year. Yields on advances stood at 13.9% in the first half, while cost of funds was down by 110 basis points to 8.4%. As a consequence, our spreads expanded by 70 basis points to 5.5%. We have raised INR 3.8 billion in the first half of the year at an average cost of funds of 7.07% which compared with our overall cost of funds in the first half at 8.4% and this number is expected to trend lower, as I mentioned earlier, due to the rating upgrade that we've seen during the quarter impact of which should come in the next 12 months' time.Disbursements within the first half stood at INR 2.5 billion. We believe that the business is very well geared for growth in disbursements and we are working towards more than doubling our sales force over the coming months, the second half of this year, which in turn should drive improvement in disbursements during the second half of the year. The COVID second wave and the subsequent lockdown in states where we have a presence, impacted our business operations and collections in the month of April and May. As a result, our collection efficiency dropped to 90% in the first quarter of the year and GNPAs and NNPAs increased to 4.7% and 3.3%, respectively. In the second quarter, the business has come back strongly, led by revival in demand and consumer confidence.Our collection efficiency in the month of September stood at nearly 100% -- and with better resolutions, we are able to pull down our gross NPAs down to 2.2% and net NPAs down to 1.4%. Total capital infusion in the business stood at INR 8.5 billion. Net gearing stands at a very modest 2.5x and our Tier 1 capital adequacy stands at 48%. Turning to our fund-based activities, which includes commitment to our various asset management, private equity products these investments registered gains of INR 2.7 billion during the quarter. The total quoted equity investments, including unrealized gains stand at INR 25.3 billion as of September.Cumulative ex-IRR on these investments stand at 19% since inception. Total equity investments, including alternate funds stands at INR 36.1 billion as of September 21 ex-IRR on our PE and real estate investments stand at 33% per annum. To sum up, last financial year was a landmark year for us, with highest ever revenues and profits. This year, also, we are witnessing a similar trend, and we delivered our highest ever quarterly and half yearly operating profits. Our retail broking business, which is our cash cow, has achieved new highs on various parameters, benefiting from the industry consolidation and the knowledge-driven PHYGITAL offerings aside of the strong tailwinds that the business is enjoying.Our institutional broking business has ranked #1 as local brokerage house in the last Asiamoney poll. Our strategy to invest our business profit in our own funds have yielded these results and resulting in our net worth touching new highs of over INR 50 billion at the end of September. Moreover, our strategy to diversify our business model towards linear sources of earnings continue to drive results. Our asset management business is likely to gain from process-driven investing and turnaround in performances, particularly on the alternate side. Finally, our housing finance business is geared for profitable growth too. All of our businesses, we believe offer meaningful headroom for growth.We are now open to any questions and answers. Thank you very much.
[Operator Instructions] The first question is from the line of Prashanth Sridhar from SBI Mutual Fund.
Could you just give us stage 2 and restructuring number for the Home Finance company?
Stage 2 number is 9%, and the restructuring number for Q2 is 1.9%.
So that's in addition to the close to 5% restructuring we have done earlier?
Yes. That's right.
Sure. And if you could just highlight how have you driven down the stage 2 number? I think last quarter, you had disclosed it at around 50%, that's a substantial reduction.
Sorry, could you be more audible?
Sorry, is it better?
Yes, it is better now.
So if you could just highlight how you've managed to reduce the stage 2? I think it's come up from 15 to 9, which is substantial.
So basically…
So in the quarter 2, we have seen the improvement in the rollbacks and improvement in the collection efficiencies also as Shali mentioned that we've also done some degree of restructuring. But primarily, it is driven by higher collection efficiencies and resolution across all buckets and also significant rollbacks, which have happened from higher buckets.
Sure. And just lastly, if I add up the stage 2 plus 3 plus restructuring, out of that, what portion is the older book?
The old book -- the new book is now about 22% in the overall book.
As you said, how much of the stress relates to the older book because that would not be a case?
New book per se, 1 plus is 5.5% per se.
[Operator Instructions] The next question is from the line of Madhukar Ladha from Elara Capital.
Congratulations on a good set of numbers all across. So first, on the broking side, the performance has been much better in this quarter and we're seeing like good momentum even on a Q-o-Q basis. So, is there anything particular that you would like to point out what is driving this? Partly, I think cash market share has been good while derivatives we've lost some market share. And is it more driven by the acquisition strategy where we had acquired a lot of the old mom-and-pop sort of brokers, right, and the franchisees. So what is actually driving this?
Yes. So as we said, so actually one is increase in the cash market share, which is our advisory-driven business where we are able to improve our cash market share by 70 basis points on a sequential basis. Secondly, of course, the volume growth, which has driven the growth in the broking revenues and coupled with that, there is also a strong traction in the distribution side of the business, where we have been able to raise partner -- new money and then even now is about INR 16,000 crores. So all of these put together, plus the higher level of the funding book also has added to the overall delta in this quarter.Plus last year, we had invested in manpower and also this year, we continue to do that. So overall, we are seeing the operating metrics clearly coming out of this. And the new channel that we have created out of the acquisitions that we have done in last year, that has also now turned profitable. So all of these put together has resulted in the operating leverage clearly coming out, and that's how the quarter on quarter consequential growth has been very strong.
And the other thing I wanted to ask was on the digital acquisition channel. I know these are sort of early days, but I wanted to get a sense of how profitable that channel is or what are the early signs? How much are you spending to acquire a customer and what sort of revenues they are generating? Maybe you could give some monthly ARPU number or something on there -- some color there would be helpful.
Yes. So actually, our ARPU in the digital channel is 5x our cost, because for us, we are into the high yielding segment once again and that's how the ARPU is in fact better for us as an overall. While the overall ARPU at the broking level is also higher and at the division level, it is even more higher. This year, even first half, we saw a very strong traction because of these numbers. Yes, Ajay you want to add?
So what has happened is that on the regional channel, surely the acquisition cost is something which we look at very closely but at the same time, because we have an advisory attached to the digital channel so we are able to get a much better ARPU on the overall piece and we are seeing strong traction in the new -- where the more than 50% of the accounts are being acquired by the digital channel, which is surely adding up when the advisory model is in place so the ARPU overall looks much better on the digital channel end to end.
Can you share some numbers if that is possible?
I don't know if I'm having it handy as far as the actual numbers are concerned. We can share it separately if required, no problem.
Sure, sure. On the asset management side...
Yes, just the cost of acquisition is about 1,700 on the digital channel.
1700? Okay.
And to add to it, we also have the distribution on this channel because you have the advisory in place. So we also do distribution on the digital channel also. So there's nothing called distribution out there.
So ARPU doesn't factor that because ARPU [indiscernible] that’s how we calculate.
Okay, okay. And 5x would be sort of your estimate of annualized ARPU there.
Right. Absolutely.
Okay. Great. On just the asset management side, can you share the net sales numbers?
Yes. So net sales for the quarter was INR 8.2 billion, and for the first half of INR 1,500 crores.
And first half was INR 1,500 crores. Okay. So then there would have been some AIF would have closed, right? So -- because I think your first quarter was 4.8% and 8.2%, that's just about 13% so you're saying 15%. So...
Madhukar in the first quarter we gave that number 4.8%, but I think some AIF money came in later part. So that's the reason we restated to almost 6.5%. So total first half is INR 15 billion and for both, actually we have garnered INR 15 billion in the first half itself.
Also about INR 5 million of money was returned in the ad front also for the ads, which were closed.
Right. So that is not reflected in this. That's not reflected in net sales. Net sales is still gross of the redemption of closing of an AIF, right?
That's right, because we have INR 1,700 crore commitment in AIF, so for the same the drawdown will happen in coming quarters.
Understood. So the PMS AUM growth still looks a little anemic, so that's just now about 4% quarter-over-quarter. Are we still seeing redemption pressures over there?
Actually, the way you want to look at it is to add the alternate assets together, the PMS and AIS because, as you know, the regulatory changes from October 1 last year drove a preference of the significance for AIS compared to PMS. So really, you may be better off just clubbing those 2 numbers, then you're looking at alternate assets and maybe taking mutual funds in a separate bucket.
Understood, sir. Got it.
Sorry to add to that, PMS grossness have been picking up well. In fact, quarter-on-quarter, we are seeing very strong traction in the PMS gross rate.
Okay. The PE business, obviously, this quarter did very well because of the carry income and what I realized also from the presentation is that we have a very good pipeline of investments, which will most likely be exited. So, what sort of exits can we look at over the next 2, 3 years? And what sort of carry income should we be building in here, if you can throw some light on that?
I think after this exit of GR Infra and the closure of IBEF I, as you know, the initial exits of IBEF II will go towards principal return. So, you may not want to model in any carry for the next 4 quarters at the very least.
Okay. Understood. And the new fund raise on the private equity side, that's roughly -- we're closing about INR 2,000 crores. What is the fee structure over there? How does that sort of start flowing in?
There is no change in that fee structure, it remains at 2% management fees and 20% carry. And also this money is accrued on a commitment basis and not a drawal basis. And any subsequent collections that you will see, even after the first close, will have to pay the commitment, the management fees, right from the first close. So, as I just mentioned, we are looking at a first close sometime in the next week or 10 days. And so, effectively for the entire fund, the booking of the management fees -- maybe on the basis of the collection, but the approval will happen right from the first close on the entire corpus of the fund.
Got it. And for how long can we charge management fees, right? I just want to understand how this business works a little bit better.
See, for the life of the fund so as you know, the life of the first fund post extension was 14 years, right? We launched it in 97 and we exited the last investment in 2021. This fund by design has an initial period, which is longer than the first one, almost 4 years so you should assume at least a decade life at the bare minimum, but there is an option to increase that by 2 years and further extend it beyond that also.
Right. Understood. And finally, on the treasury income bit, so we've seen a very sharp increase in profits this quarter. So can you split it between listed equity, private equity, that will be helpful because it seems that there's a big part of private equity also in it. I may be wrong, so?
So actually, private equity impact is INR 120 crores rest is all listed equities. Actually, there are 3 buckets, the mark-to-market, which has been disclosed, mark-to-market below the line and then mark-to-market, which has not been recognized.
That's the OCI one, which is the direct equity investments.
So OCI in for the quarter is reflected as INR 65 crores, which is reflected...
That is in addition to INR 265 crores, right?
Absolutely. That's in addition to that. So, that is actually comprising of the equity shares mark-to-market, which includes PMS as well. Then private equity is INR 120 crores out of the total INR 264 crores mark-to-market that has been booked and rest is comprising of mutual fund gains.
[Operator Instructions] The next question is from the line of Nishith from Aequitas.
Good afternoon sir. Sir, I wanted to understand more on our booking business, sir do we see...
Nishith, the audio is not clear from your line sir. Please use the handset mode.
Hello, is it clear now?
Yes.
Yes. Sir, I wanted to understand from a broking business part, sir, do we see our numbers sustainable going forward? Or was there any one-off?
Yes, Ajay do you want to take?
So surely, the way the traction is happening in the broking industry, we see that the business is being built up and this is investments which we have done over the years in terms of people, in terms of branches, in terms of the digital offerings which you do, plus the distribution business, which is aligned towards broking and as you must have heard, it is around INR 60,000 crores of AUM.So we have a holistic model in place, which we feel is surely scalable as we go ahead, be in terms of the advisory capabilities and the reference capabilities which we bring to the table plus the projective model which we talk about, where we are available at the franchisee locations and the branch locations, the biggest branches network. And at the same time, we have the digital offering of all our products. Having said that, be sure in all the broking industry is subject to market volatility and to that extent, there can be some weightage in revenues, but we surely have built the model for scalability going forward.
Okay. That's great, sir. And sir, I wanted a few numbers. So can you please share the net flows for mutual funds and PMS side of our business and also the AUM for passive funds?
Yes. So mutual fund side, we have seen net flow of almost INR 8 billion in this quarter and another -- at the alternate side, there is no net positive. It is just a flat kind of number for the quarter.
Okay. And AUM for passive funds?
INR 8,500 crore.
[Operator Instructions] The next question is from the line of Shalini Vasanta from DSP Mutual Fund.
This is Vivek Ramakrishnan. I missed a bit of the original call, what percentage of your book is restructured and how is that book performing? If you had mentioned it earlier I'll look at the transcript, but apologies. The home finance growth.
Yes. So, we already said actually 1.9% has been restructured in quarter 2 and in quarter one, we had restructured 1.4% of the book so that's the book, the total book under restructuring is 6.8%. In terms of the performance of the restructured books, it is performing well in the sense it is very much correlating to the normal book collection efficiencies that we are having.And a large portion of these assets continue to be Stage 1 assets because temporary mismatch of the cash flows in the hands of our customers, where we restructured them. Given that there was no moratorium also by the RBI, that is why we had restructured them by actually funding the portion of the EMI so that they continue to fund every EMI at the same time rather than extending the tenure. So performance has been at par with the normal book as of now.
Excellent, sir. So what you're saying is that you'd restructured it, but you'd started correcting EMI there's no moratorium on principal, like only interest collection or something you're correcting the EMIs as usual?
Yes. So we had funded the partial EMI for a period of time, and we continue to recover every month partial amount from the customers.
Sir, what partial EMI means -- okay, sorry, sir, just -- let me ask the question again, let's say, the customer has to pay an EMI of INR 100 a month and I understand you have to restructure because the pandemic was very bad. Now have we started paying at the rate of INR 100 a month or you're slowly building it up to INR 100 a month by collecting partial payments like INR 50, or how does it work?
So the customers are paying the full EMI, the EMI has -- the pace has been restructured without giving any kind of interest or principal moratorium. Obviously, interest moratorium cannot be given. But we have only restructured some based on the tenure, somewhere we have also given some kind of a short-term personal loan or to tie it over the difficult period otherwise, the full EMI for both the loans are coming on time. So there is no waiver of EMI or moratorium and there is a short EMI term.
The next question is from the line of Mihir Ajmera from ENAM Holdings.
This is like a -- regarding the brokerage business. I believe like, we have been one of the primary brokers with a long history and good heritage, so what is actually stopping us from actually having a platform with somebody -- like we’ve huge players where there is not much investment involved. Just to give you an example, like the second-line players like Paytm Money, Upstox, et cetera, everybody has actually come under the [Indiscernible]. So there's a very simple change required for the company, it should actually help in further addition. So just want to understand.
Ajay, you can take this.
Yes. We feel that our proposition is very clearly aligned towards the digital model where we feel that the research and advisory is very important for our customers. And to just discount to that and get the new customers where we don't know what is the overall ARPU, which can come.We feel that our model is much scalable with our franchise network as well as our branch network, and we are not looking at it only from a broking revenue perspective, we think that the holistic wealth management where the distribution business also plays a big play will help in the overall growth of the business from a long-term perspective. And we have been doing this for the last 30 years, and we are very confident of our model where we give value delivery to the customer rather than just giving you a platform where clients can come and do whatever they want. So we feel that the proposition is well aligned to our growth strategy in the overall scheme of things.
Surely do appreciate that actually that, I truly believe actually you offer a very holistic service, but this is a minor tweak you can say on the user interface on the platform side, which I believe is not much capital intensive. So that's just had a suggestion that's it.
Right. So we're surely on the digital side, we are investing a big thing. But to cannibalize it with the discount broking by reducing the yield, we will cannibalize our existing customers for the new one.
Yes. No, it's not about this cannibalizing the yield -- it was more to do with the, you can say, the experience that people are nowadays used to the new age broking platforms versus the existing ones. You definitely have better research and other services that offers, which is much better versus than the discount ones. But this was just coming from let's say more from user experience -- these are just minor tweaks required.
Surely. Perfect. Thanks a lot. We are surely working on the digital side, and we assure you building on to the digital platforms in a big way, be in terms of UI/UX and be in terms of products which can be done digitally.
The next question is from the line of Shubhranshu Mishra from Systematix.
First of all, wanted to understand how many banks are we empaneled with mutual fund business, it seems to be a bit low in the chart that's been put up, and how do we aim to scale up if we are low in terms of...
Can you be more audible actually, we can't hear you clearly?
Is it better? Can you hear me? So I wanted to know how many banks are we empaneled with and how do we aim to scale up our mutual fund business if the empanelments are lower with the banks because banks offer a large distribution network. That's the first question.The second question is on the EBITDA margin in the AMC business itself. When I compare it versus some of the industry leaders or even slightly lower-run AMCs, we are fairly low, so just wanted to understand the EBITDA margin, bank empanelment and the scale-up strategy, if we do not have so many banks empanelments at AMCs.
Yes. So we are empaneled with all the banks, I don't know where you get the impression that we are not empaneled with anyone. Everybody from HDFC Bank, ICICI Bank, Kotak Bank, Axis Bank, IndusInd, Federal, and I can go on that, SBI, I fail to understand who doesn't distribute us. So everybody is distributing that.
Okay. Maybe I wanted to correct myself, earlier like 10% in that MO-MF AUM mix chart that has been put also, so that's something I'm referring to.
Yes. So traditionally, we have been quite strong on the retail channel, whether it is ISAs or MDs followed by wealth and relatively less banks, banks also had their own requirement of a 3-year to 5-year history of the fund. And as you can imagine, our oldest funds here in the mutual fund space are less than 8 years old, right. So it's obviously, you don't have that legacy of 2 decades, 3 decades that you are probably comparing us with the other asset management companies who've been around for a lot longer and have gradually accumulated that AUM with the banking customers over a period of time.Also, some of the mutual funds, which are bank subsidiaries enjoy that benefit of very large AUM from their parent company and we enjoy that benefit in terms of a large AUM from our own captive customers, as you are aware, besides having one of the highest share of direct among all the asset management companies. Turning to the EBITDA margin, once again, I don't know which AMC you're comparing this with, which are smaller than us and have a superior EBITDA margin.But while there are about 45 asset management companies in India, and we don't rank in the top 10 AUM as you are aware, we are the 7th or the 8th most profitable asset management company in India. So, even in terms of EBITDA margins for this quarter that we reported, we are at 39%. And aside of those which have AUM in lakhs of crores really, there is nobody who comes anywhere close to this number, whether it is yields, where it's EBITDA margin.So you may want to do a little comparison and then circle back with our Head of Investor Relations, Rakesh Shinde. We have all those numbers for other asset management companies also for the year ending March 21. It may be illustrative for you to compare all of those -- we can share those numbers with you.
[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Mr. Shalibhadra Shah for closing comments. Thank you, and over to you.
On behalf of Motilal Oswal Financial Services, I would like to thank every investor for attending the Q2 FY 2021 con call. In case of any further queries, please do get in touch with me or our Investor Relations desk.Thank you, and have a good day, and Happy Diwali and a prosperous New Year in advance. Thank you.
Thank you. Ladies and gentlemen, on behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.