UBS has initiated coverage on Motilal Oswal with a “buy” rating and a price target of ₹1,150, which implies an upside potential of 38% from Thursday’s closing levels.
Analysts at UBS highlight that MOFSL’s transition toward an AUM-led business platform is a critical driver for achieving non-linear earnings growth, setting the company apart in a competitive landscape.
Why Is UBS Bullish On Motilal Oswal?
UBS views Motilal Oswal Financial Services as a structural beneficiary of the ongoing financialization of savings in India, which is fueling rapid expansion in assets under management (AUM).
The brokerage expects this trend to remain a primary growth engine, projecting the company’s Assets Under Management (AUM) to grow at a Compound Annual Growth Rate (CAGR) of 21% between financial year 2026 to 2029.
This growth in AUM is anticipated to directly translate into a 19% revenue CAGR for the same period, the UBS note said.
Does Motilal Oswal Have Re-Rating Potential?
A key aspect of UBS’s bullish thesis is the market’s perceived underappreciation of MOFSL’s business transformation. The firm is actively shifting its revenue mix toward higher-quality, recurring wealth management and distribution earnings. This strategic move is vital as it successfully reduces the company’s reliance on the traditional, cyclical nature of the broking business.
This improved earnings mix, coupled with significant operating leverage, is expected to drive a robust 22% earnings CAGR through financial year 2029, according to UBS. As investors increasingly recognize the stability and scalability of these recurring income streams, the brokerage believe there is strong potential for a valuation re-rating.
Is Motilal Oswal A Buy Or Sell?
All five analysts who have coverage on Motilal Oswal Financial Services have a “buy” recommendation on the stock. The consensus estimate of price targets is also at ₹1,147, which is nearly the same as UBS’ price target on the stock.
Shares of Motilal Oswal Financial Services ended 1% lower on Thursday at ₹832.85. The stock has recovered all the losses it made until the end of March and has nearly turned positive on a year-to-date basis.
