Non-Lending Q1 Results Preview - Capital Markets-Linked Companies To Deliver Decent Performance: Motilal Oswal

Motilal Oswal Report

Despite volatility during the election period, equity indices continued their upward journey and surged to new all-time highs (Nifty 24,000+, Sensex 79,000+) in Q1 FY25. This translated into healthy trends in key parameters (volumes, orders, client additions, etc.) for capital markets-related companies. Angel One Ltd. and BSE Ltd. would benefit from these trends.

In the AMC sector, net equity inflows were buoyant in April-24 and May-24. Growth in equity AUM was primarily backed by strong SIP flows (all-time high in May-24 at ~Rs 210 billion). Total MF AUM grew 6.5% (over March-24-May-24) owing to strong growth in equity and money market AUM. The increase in equity AUM should boost the performance of Computer Age Management Services Ltd. and 360 One Wam Ltd.

Private life insurance companies saw 16%/18% growth in APE in Apr-24/May-24. In Jun-24, we expect steady growth for the industry. In VNB margins, we expect steady or improving trends QoQ as the rising share of ULIPs could be offset by scale benefits.

Excluding crop, the general insurance sector witnessed steady GWP growth of 16% and 14% in Apr-24 and May-24, respectively. Growth in the health segment was steady at 17% YoY in Apr/May-24 (16.5% in Q4 FY24).

The motor segment too saw strong growth of 18%/13% YoY in Apr/May-24 (10% in Q4 FY24). The health segment’ loss ratios are expected to decline on the back of price hikes. We expect Star Health and Allied Insurance Company Ltd. and ICICI Lombard General Insurance Company Ltd. to report improvement in profitability.

We remain positive on the long-term growth potential of non-lending financials, given their broader themes of financialization and digitization of savings. Our top picks in this space are SBI Life Insurance Company Ltd. and Star Health.

While we continue to like the capital market sector, uncertainty around regulations will keep stock performances in check.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.