Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
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Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive (G) - 11.3846Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive-Dir (G) - 11.4181Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative (G) - 10.9654Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative-Dir(G) - 11.0015Motilal Oswal Dynamic Fund (Div-A) - 14.1399Motilal Oswal Dynamic Fund (Div-Q) - 12.664Motilal Oswal Dynamic Fund (G) - 15.6026Motilal Oswal Dynamic Fund-Dir (Div-A) - 14.3632Motilal Oswal Dynamic Fund-Dir (Div-Q) - 12.8792Motilal Oswal Dynamic Fund-Dir (G) - 16.5268Motilal Oswal Equity Hybrid Fund - Direct (G) - 16.4362Motilal Oswal Equity Hybrid Fund - Regular (G) - 15.6555Motilal Oswal Flexi Cap Fund(D) - 27.2528Motilal Oswal Flexi Cap Fund(G) - 36.2551Motilal Oswal Flexi Cap Fund-Dir(D) - 27.3405Motilal Oswal Flexi Cap Fund-Dir(G) - 38.8868Motilal Oswal Focused 25 Fund - Direct (D) - 22.5111Motilal Oswal Focused 25 Fund - Direct (G) - 38.4537Motilal Oswal Focused 25 Fund (D) - 20.1781Motilal Oswal Focused 25 Fund (G) - 34.3801Motilal Oswal Large and Midcap Fund - Dir (D) - 17.3261Motilal Oswal Large and Midcap Fund - Dir (G) - 17.3408Motilal Oswal Large and Midcap Fund (D) - 16.7609Motilal Oswal Large and Midcap Fund (G) - 16.761Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0043Motilal Oswal Liquid Fund - Direct (Div-M) - 10.03Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.0034Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0058Motilal Oswal Liquid Fund - Direct (G) - 11.2006Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0042Motilal Oswal Liquid Fund - Regular (Div-M) - 10.03Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.0034Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.013Motilal Oswal Liquid Fund - Regular (G) - 11.1541Motilal Oswal Long Term Equity Fund (D) - 21.5046Motilal Oswal Long Term Equity Fund (G) - 27.3747Motilal Oswal Long Term Equity Fund -Dir (D) - 25.6699Motilal Oswal Long Term Equity Fund -Dir (G) - 29.9503Motilal Oswal Midcap 30 Fund (D) - 25.6227Motilal Oswal Midcap 30 Fund (G) - 41.9429Motilal Oswal Midcap 30 Fund-Dir (D) - 26.5417Motilal Oswal Midcap 30 Fund-Dir (G) - 46.083Motilal Oswal Multi Asset Fund - Direct (G) - 10.944Motilal Oswal Multi Asset Fund (G) - 10.7567Motilal Oswal Nasdaq 100 FOF - Direct (G) - 23.6638Motilal Oswal Nasdaq 100 FOF - Regular (G) - 23.398Motilal Oswal Nifty 50 Index Fund - Direct (G) - 14.8351Motilal Oswal Nifty 50 Index Fund (G) - 14.726Motilal Oswal Nifty 500 Fund - Direct (G) - 17.1524Motilal Oswal Nifty 500 Fund (G) - 16.925Motilal Oswal Nifty Bank Index Fund - Direct (G) - 13.701Motilal Oswal Nifty Bank Index Fund (G) - 13.5202Motilal Oswal Nifty Midcap 150 Index Fund (G) - 19.7725Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 20.0505Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 15.0847Motilal Oswal Nifty Next 50 Index Fund (G) - 14.9091Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 20.4288Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 20.7098Motilal Oswal S&P 500 Index Fund - Direct (G) - 14.865Motilal Oswal S&P 500 Index Fund (G) - 14.7245Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 10.0029Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 10.0263Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 10.0099Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 10.1541Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 10.014Motilal Oswal Ultra Short Term Fund - Dir (G) - 14.173Motilal Oswal Ultra Short Term Fund (Div-D) - 9.9475Motilal Oswal Ultra Short Term Fund (Div-F) - 9.9582Motilal Oswal Ultra Short Term Fund (Div-M) - 9.948Motilal Oswal Ultra Short Term Fund (Div-Q) - 10.0925Motilal Oswal Ultra Short Term Fund (Div-W) - 9.951Motilal Oswal Ultra Short Term Fund (G) - 13.7006

Financials: Ready to Launch

Blog Blog Details
  • January 07, 2021
  • Santosh Singh|
  • Head of Research
For any emerging economy money is the life blood, and financials are the ones pumping it in the system. Need is lower when one is sleeping but the need is much higher with increased activity. Like a strong heart can handle high level of stress a strong financial system is important for very fast growth. This has been the reason why the sector has outperformed in almost all the cycles

The impact of anaemic credit growth over GDP has been quite visible over last 5 years when gradual reduction in credit growth has meant that the economic growth fell significantly. However, this has also given chance to the system to go through deep cleaning and increase capital base

In my view we would not see revival in the economy without recovery in the financial system and ultimately an outperformance by financials stocks


Banking is one of the last sectors to recover:

Given the perception that banking is the sector which would bear the brunt of economic disruption, it recovers at the end. During the GFC as well the fall was highest in this sector with delayed recovery. Despite markets being at one of the highest valuations ever, most of the banks are trading in line with long term averages and many below it. However, given the nature of the sector we can’t see an economic recovery if the banking doesn’t do well. During GFC the sector was 4x in one year once the recovery started. Also, evolving data is suggesting that the credit cost would not be high and it may not be as divergent as was seen in the last ten years and hoped by many of the market participants.

Banks and well capitalised NBFCs will get market share
In last ten years Indian banks faced significant competition from money markets as well as all types of NBFCs. This was driven by easy and cheap availability of credit for NBFCS and investors chasing high yields investing in mutual funds who aggressively lent in the credit market. This led to significant market share gains for these non-bank lenders who in FY17 reached a market share of almost 80% of the incremental credit for that year. This numbers used to be 35% to 40% during most of the part of last decade. However, post ILFS  liquidity in the market became scare, rates increased for low rated NBFCs and credit funds of mutual funds lost a lot of money due to default. Hence, the competition from non-bank lenders has reduced significantly. We would expect this trend to continue for few more years and the banks may again go back to around 60-70% market share in the incremental lending. Also, high quality NBFCs would gain market share.

Non lenders may do better
Although non lending financial companies per se have been performing well over the last decade specifically the insurance companies. However portfolios of investors and benchmarks have been dominated by the stocks of lenders. Until last month all the financials stocks in Nifty 50 were lenders. With inclusion of HDFC life and SBI life (from 25th 
September) there is some representation of non-lenders in the benchmark. This would bring some more focus on non-lenders from the investors. We believe that insurance space provides long term opportunity with higher return ratios and lower capital requirement and hence the share of these along with AMCs brokerages etc will keep increasing in the investment universe of the investors.

Also, another area which may see outperformance even relative to the banking system is the Fintech space and within that payment space may see significant traction with digital payments being the theme.

Hence overall financials may be late to recover but over last twenty years this sector has always figured amongst outperformers in almost all of the five year cycles. 

-Mr. Santosh Kumar Singh, Head of research – Motilal Oswal Asset management Company

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