Motilal Oswal Home Finance Limited (MOHL), a wholly owned subsidiary of Motilal Oswal Financial Services (MOFSL), has delivered a robust performance for the fourth quarter (Q4FY25) and the full financial year (FY25), underpinned by a sharp uptick in disbursements, geographical diversification, stable profitability, and sustained asset quality improvements. With a deep strategic focus on affordable housing finance, technology adoption, and distribution network expansion, MOHL is firmly positioning itself as a major player in India’s evolving housing finance landscape.
Despite the stellar performance, some industry report indicating that Motilal Oswal Group is considering selling its housing finance arm, Motilal Oswal Home Finance (MOHF). However, the company has deny the statements but some sources indicate the group has enlisted Avendus Capital to explore potential buyers.
1. Loan Book Growth and Disbursement Momentum
MOHL’s loan book expanded to INR 4,878 crore by March 2025, registering a 20% growth YoY, up from INR 4,074 crore a year ago. Notably, the Q4FY25 disbursements stood at INR 781 crore, a 63% jump YoY from INR 480 crore in Q4FY24, while full-year disbursements surged to INR 1,794 crore, up from INR 1,006 crore in FY24—marking a 78% increase.
This aggressive growth is attributed to:
- Expansion into Tier-2 and Tier-3 cities,
- Focus on retail and granular book building,
- Strengthened Sales Relationship Manager (RM) strength across geographies.
“MOHL is scaling up by expanding its RM bandwidth and leveraging technology to penetrate deeper into underbanked markets while maintaining asset quality,” said a company source.
2. Motilal Oswal Home Finance Q4 FY25 – Financial Metrics
Despite entering a deliberate investment phase, MOHL has preserved its financial resilience. Here’s a breakdown of key metrics:
| Metric | Q4FY25 | Q4FY24 | FY25 |
|---|---|---|---|
| Net Interest Income (NII) | 88 | 80 | 130 |
| PAT | 37 | 37 | 130 |
| Net Worth | 1,429 | 1,287 | ↑11% |
| Yield | 13.7% | 14.2% | ↓ |
| Cost of Funds (COF) | 8.4% | 8.3% | ↑ |
| Spread | 5.3% | 5.9% | ↓ |
| NIM | 7.3% | 7.6% | ↓ |
| Cost/Income Ratio | 56.2% | 45.9% | ↑ |
| ROA | 2.8% | 3.2% | ↓ |
| ROE | 9.6% | 10.9% | ↓ |
While spreads and margins were under slight pressure due to fair practice code circular impact and rising COF, the company absorbed the cost impact thanks to scale and operational efficiency.
“We are witnessing an intentional rise in opex due to investments in people, processes, and tech infrastructure. These are long-term enablers,” the management stated.
3. Asset Quality: Maintaining a Pristine Book
MOHL has consistently improved its asset quality metrics—demonstrating strong underwriting and collection efficiency.
- Gross NPA (GNPA) declined to 0.8% in FY25 (from 0.9% in FY24)
- Net NPA (NNPA) maintained at 0.4%, showcasing effective risk controls.
- 1+ DPD, 30+ DPD and 90+ DPD buckets showed significant improvement YoY.
This trend reflects the company’s prudent focus on low-risk borrower segments, affordable housing loans, and the use of AI and data analytics in credit assessment.
4. Operational Efficiency
MOHL Q4 FY25 shows that the company has made major strides in improving branch-level productivity:
- Retail Loan Book per Branch rose from INR 2.57 Cr (Q4FY24) to INR 4.12 Cr (Q4FY25).
- Retail Disbursement per Branch jumped from INR 6.20 Cr to INR 10.99 Cr for the full year.
- Opex to Disbursement Ratio declined from 15% in FY24 to 12% in FY25.
These figures underscore enhanced operational leverage due to digitization and network optimization.
5. Capital Position and Leverage
With a CRAR of 40.8% (against a regulatory minimum of 15%) and net leverage of 2.2x, MOHL is in a strong capital position to support its aggressive loan book expansion. The recent increase in net worth further reinforces its balance sheet durability.
6. Treasury & Strategic Investments
MOHL benefits from a robust treasury function and strategic investments in MOFSL-manufactured products. With an XIRR of 17.9% since FY14, its treasury provides not only income stability but also the flexibility to absorb shocks during uncertain periods.
Promoters and sponsors maintain a combined “skin in the game” exceeding INR 10,000 Cr, demonstrating long-term alignment with stakeholders.
7. Outlook
MOHL’s strategic roadmap centers on:
- Scaling its affordable housing finance book
- Enhancing digital lending platforms for speed and reach
- Expanding into semi-urban and rural markets
- Sustaining credit discipline and asset quality
With strong tailwinds from India’s rising demand for home ownership and regulatory support for affordable housing, MOHL is well-positioned to deepen its presence and emerge as a formidable player in the housing finance sector.
Motilal Oswal Home Finance Q4 FY25 vs. Q3FY25
Motilal Oswal Home Finance Q4 FY25 results displayed sequential strength across all key performance indicators, building on the solid Q3 foundation. Here’s a side-by-side look at the performance:
| Metric | Q4FY25 | Q3FY25 | QoQ Change |
|---|---|---|---|
| Loan Disbursement | 781 | 394 | ↑ 98% |
| Loan Book | 4,878 | 4,321 | ↑ 13% |
| Net Interest Income | 88 | 88 | Flat |
| Profit After Tax | 37 | 37 | Flat |
| Net Worth | 1,429 | 1,393 | ↑ 2.6% |
| Gross NPA (%) | 0.8% | 1.4% | Improved |
| Net NPA (%) | 0.4% | 0.8% | Improved |
Key Takeaways from Q4 vs Q3:
- Disbursement Surge: Q4 disbursements nearly doubled from Q3, showcasing strong sales momentum and successful execution of year-end targets.
- Loan Book Accretion: A 13% QoQ growth in the loan book indicates robust credit demand and efficient onboarding processes.
- Stable Profitability: NII and PAT remained flat sequentially, highlighting cost stability despite higher loan processing volumes.
- Asset Quality Gains: A substantial drop in GNPA and NNPA ratios reinforces MOHL’s collection efficiency and credit risk management prowess.
Conclusion
Motilal Oswal Home Finance Q4 FY25 results reflect a healthy blend of growth, prudence, and forward-looking investments. As the company enters a strategic growth phase, it is balancing expansion with asset quality discipline—a feat not easily achieved in the competitive NBFC-HFC landscape.
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