Motilal Oswal Financial Services Limited (MOTILALOFS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Fezan, the moderator for this conference. Welcome to the fourth quarter and full year ending FY '21 Earnings Conference Call of Motilal Oswal Financial Services Limited. We have with us today Mr. Raamdeo Agrawal, Chairman; Mr. Motilal Oswal, Managing Director; Mr. Navin Agarwal, Director; Mr. Shalibhadra Shah, Chief Financial Officer; Mr. Rakesh Shinde, Investor Relations. [Operator Instructions] Please note that this conference is being recorded. I would now like to invite Mr. Navin Agarwal to make his opening remarks. Thank you, and over to you, sir.

Good morning, everybody. It's my pleasure to welcome all of you to the Motilal Oswal Financial Services call for the fourth quarter and the year ending March 31, 2021. We hope that each one of you and your families are safe and in good health. We are happy to report our quarterly and full year profits for the year ending March '21. Our reported profit for the fourth quarter grew by 34% quarter-on-quarter at INR 4.48 billion, and for FY '21, we're up substantially at INR 12.45 billion. Operating profit grew by 87% for the fourth quarter at INR 1.8 billion and 33% for the full year at INR 5.3 billion. Consolidated net worth touched an all-time high, which is at INR 44 billion, while the net debt is at about INR 40 billion. Excluding Home Finance, the debt equity declined to 0.6x. We are a net cash company net of our investments, and the reported return on equity for the year was at 38%. During the year, the company completed the buyback of its equity shares of INR 1.5 billion, resulting in a small increase in promoter holding by 1.3% to 70.6%, still well below the permissible limit of 75%. The Board has also declared a final dividend of INR 5 per share on a face value of INR 1 in addition to the interim dividend of INR 5 per share. I'll now run you through individual businesses. Despite constant chatter of the rise of discount brokerages, our Broking business reported highest-ever revenues, continued to gain market share and saw highest-ever quarterly as well as annual client additions. Market share improved by 30 basis points to 2.7% for the year. We added 225,000 new clients in the fourth quarter, which is up by 81%. We added 620,000 clients for the year as a whole, which is up 150%. The National Stock Exchange active clients of Motilal Oswal registered a 50% growth to 564,000 clients. Distribution is an area of focus for the retail booking business, and the distribution AUM was at INR 128 billion, up by 42% year-on-year. As we see 13% of the 2 million broking client base having cross-sold a single product, we expect the AUM and the fee income for this business to continue to rise as we increase the proportion of customers who can be cross-sold and increase the number of products that are cross-sold. In the institutional booking business, the team was ranked #1, best local brokerage house in Asiamoney Poll 2020. Also judged as the best research team, best sales team, best sales trading team and the best corporate access team. We've seen improvement in our domestic client banking and enjoy top 3 ranks with most of the institutional clients. Turning to the Asset & Wealth businesses. The asset management business AUM was at INR 457 billion, up by 54% year-on-year. Profits for the quarter were at INR 691 million, up by 94% year-on-year. For the year as a whole, the AMC profits were at INR 1.6 billion and were flat on a year-on-year basis, impacted by lower average AUM due to correction in March 2020, also due to cut in the PE/RE mutual funds. However, mutual fund yields have improved during the quarter, resulting in overall yield improvement. Private equity business has committed AUM of INR 66 billion across 3 growth funds and 4 real estate funds. We launched IREF V with a target size of INR 8 billion. Wealth management business AUM stood at $253 billion, up by 62% year-on-year. Revenues for the business grew by 45% year-on-year during the quarter and 26% for the year as a whole, led by strong net sales of INR 27 billion for the year as a whole. Our trail revenues continue to predominantly cover our fixed cost for this business. Turning to the Home Finance business. The business reported a profit of INR 184 million for the fourth quarter and INR 398 million for the full year. Profit includes very high tax rate on account of restatement of tax assets post migration to the new tax regime. Yield on advances remained flat at 14.2% in the fourth quarter. Cost of funds is down by 130 basis points year-on-year to 8.77%. Spreads have expanded by 123 basis points year-on-year to 5.4%. NIMs have expanded to 6.1% in the fourth quarter. Incremental cost of the $14 billion that we raised during the year averaged 7.5% versus 8.77% overall cost of funds. Hence, we expect this trend of cost of funds to continue to trend lower. Loan book stood at INR 35 billion as of March '21. Disbursements grew 42% year-on-year to INR 2.7 billion. Sales force expansion is currently underway as we look to ramp up disbursements. Gross NPAs declined 75 basis points quarter-on-quarter to 2.2%. Net NPA stood at 1.5%. Collection efficiency in the month of March was encouraging at 97%. Although these numbers will be impacted due to the second COVID wave. OpEx for the year was down 10% year-on-year, bringing down the cost-to-income ratio to 33% for the year against 41% in the last year. Tier 1 capital adequacy ratio was at 48%. Net gearing stood at 2.8x, and liquidity remains comfortable. Our fund-based activities include commitments to our own asset management products. Total quoted investments stood at $21.8 billion, and including alternate funds, stood at $31 billion. Our fund-based investments have registered sizable gains of $2.6 billion during the quarter and INR 7.7 billion during the full year. To sum up, this financial year has been a good year for us. Our capital market business has scaled up well and continues to benefit from industry consolidation and also continues to make investments. Our institutional broking business has been ranked #1 as local brokerage house in Asiamoney Poll. Our strategy to invest business profits in our own equity investment products has yielded favorable outcomes with net worth crossing INR 44 billion. Asset & Wealth management businesses remain big focus areas to raise their salience in the coming years. A lot of efforts and investments have been committed to home finance business. We are working to improve its return on equity and contribution to the overall profit pool. Judiciously deploying the capital accumulated through gains on investments remains an opportunity. We can now open to question and answers. Thank you.

[Operator Instructions] The first question is from the line of Prakash Kapadia from Anived Portfolio Managers.

Congrats on the good set of numbers. I had a couple of questions. On the asset management business, if I look at the PMS AUM, it is around INR 15,000 crores. And this is same as it was 3 years ago. So is there some market share loss for us, or has industry in the PMS not grown or some shift has happened, if you could comment on that? And secondly, on the AMC side, what is the percentage of passive funds to total mutual fund AUM as on FY '21 versus FY '20?

So as far as the PMS business is concerned, there was a big mark-to-market down last year ending March '20, and then there was a recovery in the current year, right? So the overall market performance itself, if you see over the last years has not been significant. On top of that, there have been redemptions across the board for active managers, whether it's mutual funds or PMS. And this business has gone through the same trend. Both of these factors have impacted the overall AUM number that you spoke about. In terms of the share of passive in the overall business, our passive AUM is about INR 50 billion right now.

As on this year-end?

Yes.

And this was worth around INR 15 billion, INR 20 billion last year?

That was actually INR 8 billion last year.

And Navin, you mentioned about redemption across the board. So it was not really market share loss. Industry itself as a PMS has not grown? Is that correct?

There are no market share numbers available for alternate assets, unlike for the asset management business where you have monthly peer data points that are available. But as you are aware, we had our own performance challenges, which has also contributed to the redemption, aside of the overall industry redemption trend.

Secondly, on the Home Finance side, you mentioned about sales force being ramped up. So is there a possibility of AUM growth? And if I look at the it on the collection side, we are seeing consistent efficiency and prepayment both. So what is leading to this? Because I would guess this time around rural and Tier 4 would be more affected. So could you give some color on that?

So we have set the house in order in terms of the legacy book, and you talked about the collection efficiency. We've made significant investments in our collection team, which is nearly 500 people strong. We are now looking to ramp up our sales team because we are looking to ramp up our disbursements. I mean the current level of disbursements of INR 2.7 billion are very small in the context of the 100-plus branches that we have -- 105 branches that we have as of March '21. So if you look at the industry rule of thumb of INR 20 lacs, INR 25 lacs disbursement per branch eventually, then we will need more feet on the street. There is definitely an issue about the -- about COVID and its impact on disbursements and -- but we are building this business from a longer-term perspective. And the ramp-up will happen gradually on that we'll have -- the entire ramp up will happen immediately. We will be increasing our headcount over the next 3 to 6 months' time. But our ambition is -- clear ambition is to grow our disbursements from the level of INR 2.7 billion that you saw last year.

Lastly, on the broking side, if you could comment on the banking partnerships, that helping, the online foray helping? Is the T1 account helping? And if I look at the DPD out of around 2 million retail clients, 5.5 lacs are active. So is it active means one trade a year? How do we define active? And it's around 27%, 28% of our total base. How is this for the industry? If you could shed some light on that.

Are you on the call? Are you on the call? You can be specific.

Yes. Yes. I'm on the call. So actually, what we have seen is that on the booking side, the active client base, surely for us is much better compared to the industry because we have got a very good advisory setup and the research base, so we have a good set of advisers. So I think for the industry it could be much lower compared to, but we don't have such numbers. The numbers which come out is only about the number of active clients that is one trade a year. When you talk about active, it is one trade a year. That is how the industry is calculating it. So that is how the overall pie is. But surely, we have got a bigger sales we're holding because of our advisory setup, and we try to engage the clients not only to broking, but also with all our distribution and asset products.

And on the banking partnership, is there some specific banks, which we have tied up recently for T1 accounts? Is that helping?

So we have tied up with multiple banks, Au Bank has been one of the big tie-ups, and we are tying up with multiple other banks also. But the ramp-up is mainly on the direct side in a big way. So we have increased the hiring. We have got more than 1,000 people hired in the last year. So it is mainly on the brand side where the hiring is happening, on the branch as well as on the online digital side.

This is the operator. Sorry to interrupt you. Mr. Kapadia, may we request that you return to the question queue for follow-up questions. The next question is from the line of Shalini Vasanta from DSP Mutual Fund.

This is Vivek Ramakrishnan. All my questions are on the housing finance business and so I'll just ask them in sequence. I noticed that 70% of your customers are documented customers, whether it's self-employed or salaried. And the yield on your portfolio is 14%. So the question is, where is the juice? Given that mortgage is so competitive, would you see more business transfers going forward because your customers seem to be good quality or banking-friendly customers? So that was question number one. And second was, you have given the fixed rate and floating rate mix in your liability side, which is 65%. On the asset side, given the fact that it's already yielded 14%, is it all floating? Or is it going to be fixed at this stage because the vulnerability increases if interest rates start going up? And lastly, would you be able to give the constructed versus under construction mix in your home loan portfolio?

So, Arvind is there. Arvind, can you talk about that and maybe Shali can talk about fixed and floating kind of liability?

Yes. So just to answer your first question in terms of the profile of the customers that we have, so we have about 55% of our borrowers are salaried borrowers, and therefore, naturally, they come with documented income. On the self-employed side, also out of the balance, 44%, 45% that we have, almost 60%, 70% of them have documented income. Now the point is that, there, we will continue to pursue that strategy in terms of focusing on a similar kind of a mix. Mix may slightly move towards more of self-employed borrowers, but that would not largely impact our overall mix on an -- by the incremental basis, self-employed contribution may increase a little bit, but on a portfolio basis, it will not have a significant impact. There has obviously been last 6, 7 months, we have seen some degree of impact on the interest rates, and we have seen the interest rates have started to come down, both on the asset side as well as on the liability side. As Navin has mentioned, our liability book has been repriced significantly. And therefore, we will have to necessarily pass on some advantage to the customers as well. So while the margins will remain intact and NIMs will increase because of the increase in the reversal that we expect if COVID challenges permit us so. So -- but at the same time, the yield on the portfolio is expected to slightly reduce because of the impact of the competitive forces and benign interest rates in the market.

Yes. Coming to the liability side, what you said. So 2/3 is floating and 1/3 is fixed. So basically, what we have done is, actually what Arvind said is that we also started offering semi-fixed rate loans to our customers in last year. So there, basically, for the first 2 years, the interest rate is fixed, and then it is floating. So that takes care of our interest rate sensitivity as well, and at the same time, also give some cushion to the yield given the benign interest rates in the market.

Sir, if I may ask, I mean the question that is bothering me -- the issue that's bothering is me is have a prime rate mortgage at 7%, and your yield with 70% being documented customers is 14%. It seems too wide. Where does the -- where is the juice? I mean what is the secret sauce for those customers? And wouldn't they go to another person who's offering, let's say, a 10% yield on mortgages? That's the question I had.

So if you look at the balance transfer rates, they are pretty much of our organization in terms of what is the BT out for the last 1 or 2 years, if you look at those trends, they are pretty much in line with the trends of our -- of the market, of the industry itself. So about 0.2%, 0.3% per month is the BT-out rate, and we also do a fair degree of BT in accordingly. So balance transfer, anyways, is part and parcel of the mortgages business. It is irrespective of the segments in which you operate. And second point is that as far as documented income is concerned, it does not necessarily mean that just because a customer has a documented income -- so the target market segment within the documented income also for different banks is different. The market is -- the opportunity of the market is huge in terms of the kind of customers that we target. We look at more of low-income group, economically weaker section, even though they have documented income. Ticket sizes are very different in nature because we are at around INR 7 lacs to INR 8 lacs ticket sizes. So when we look at the universal housing finance companies, their target market customer in terms of ticket size and in terms of, even the documented income, is very different in nature. So they look at a very different profile of documented income customers. So while the balance transfer is the reality in housing finance business, but that is part and parcel of your business plan, and you take it into cognizance when you are kind of making your business plan. So about 0.2%, 0.3% of balance transfer out is the reality, and it will always continue to happen. And you will have to keep building up your book accordingly given that reality of balance transfer. As far as -- majority of our book, continues to be floating rate in nature. And so therefore, the interest rate risk always lies with the customer. And as I said, that our customers are basically low-income group customers and economically weaker customers, and we'll continue to pursue that strategy of underwriting these customers. Even though they have documented income, it is not that cases are approved without personal discussion and without meeting the customers. And also then the nature and type of properties that are involved are fairly different than what typically the universal housing finance companies target. So they have -- say, they usually do a lot of builder -- under construction kind of a property. Our percentage of under construction, if you look at our incremental disbursal, also has substantially come down. So focus is more on self-construction, resale and kind of -- such kind of transactions.

Just to add, almost 35% of our customer base is maybe new to credit segment. And almost 80% to 90% of our customers are buying their first -- secure their first housing loan. So because of that also there's no competitive pressures from the banking tenders also. So there, we are able to command a higher interest rate.

And these would be eligible for the subsidy under the government schemes, right, sir?

Yes, yes. Absolutely. Yes.

Yes, absolutely.

The next question is from the line of Rahul Bhangadia from Lucky Investment Managers.

Just a question on the asset management side. You have mentioned in the presentation of accrual of INR 22 crores in the quarter. How do you look at it from a steady state point of view? Is that 40 -- 40, 41, 42 basis points of that range is the thing that we should look at? Or there is something on the mix that will change? Or is there something that will help this creep up every year?

Should it -- passive AUM denominator, you should get -- okay. So basically, you X the passive AUM comp denominator, then the rest of the business dynamics remain on a steady state. Also the performance fee varies from year-to-year. So this year, obviously -- last year, for instance, there was no performance fees because markets collapsed in the March quarter. And this year, there was performance fees because of the strong performance of the markets for the year as a whole, right? So X the performance fees and removing the passive business from the denominator, you should be able to get a steady state. Now as and when you see the AUMs growing as those start coming in, the OpEx, obviously, will have a meaningful leverage like you've seen for most of the other bigger AMCs. So if you compare our OpEx-to-asset ratio will be on the higher side given the smaller scale compared to the bigger AMCs.

Next question is from the line of Nishith Shah from Aequitas Investment.

Congratulations on good set of numbers. Sir, I wanted to understand that margins in the booking segment this time were lower. So any particular reason for this?

So actually, margin in this quarter, if you are specifically referring to. And basically, because profit growth also includes the impact of the variable, which is actually catching up over the course of the whole financial year, based on the targets. That is one of the reasons where you will see this. However, on an overall year-on-year basis, full year basis that you see, the PBT margin is up by 300 basis points in FY '21 over FY '20. And that also includes the investment that's currently of about 1,600 employees in our business across North and South geographies, basically. So if you actually remove this impact, then actually, there is a 500 basis points operating leverage impact in the P&L on a year-on-year basis.

Okay. Then, sir, I want to come on investment banking side of the business. Over there, how do we see the pipeline? And what is our outlook?

Yes. So we are looking at a reasonably good pipeline and a hopeful turnaround on this business in the coming year from the losses that you've seen that we reported in the last year.

Okay. And sir, my last question is on our AMC business, so our total AUM is approx INR 46,000 crores. And this includes the INR 7,000 crores of passive AUM or that is different?

It includes that as a double counting in that number because we have a fund of fund on NASDAQ, which in turn invests in the same fund, right? So the actual passive AUM would be lower to that extent.

Okay. And sir, lastly, if you can give us gross and net flows for mutual funding, PMS business for this quarter?

Rakesh?

So there is a net flow of INR 4 billion in mutual fund in Q4?

Sorry, I did not -- that wasn't clear.

Net sales of INR 4 billion in Q4 in mutual fund.

Okay. On PMS?

Yes. PMS, there is outflow almost INR 10 billion.

The next question is from the line of Kajal from ICICI Securities.

Sir, just have 2 questions. One is on the retail broking where you have only client traction. So how much is that acquisition for smaller retail brokers that you have mentioned? So how much of traction will be because of that? And how much it has further also added on the volume side? And the second question was on the alternate side. I just wanted to understand what has led to that strong performance this quarter?

On this last 1 year, 1.5 half year, we acquired almost 15 small bookers. And I would say almost 80,000 to 90,000 client addition would be on that basis. I should say we can add further. What is your next question, Kajal?

I just wanted to know -- alternate segment has done well. So what are the factors there?

Yes. So as I said earlier, so actually on the alternate side in the quarter 4, there was a performance fee impact, which has come of INR 22 crores at the overall net revenue level. And that is one of the reason, which is there. Plus added to that, average yields have been going up as well. Average yield is up about 4%. And there is also fee performance impact, which we charge on an annual basis, which is under the alternatives.

So just one thing I wanted to ask. So whatever client addition that we are seeing now, so how much conversion rate that you are seeing into active generally?

Almost 40% is the conversion rate, which we'll make immediately active within a time frame of 1 month?

[Operator Instructions] The next question is from the line of Nagendra Maurya from Growthx Capital.

Am I audible, sir?

Yes.

Sir, just got a little question about your strategy of investing your profit in your own funds. Sir, how are you planning this strategy for going forward? Is there any plan other than this strategy of investing your profit in your own funds?

So I think what we have done is that whatever the free cash flow year after year, that needs to be after free cash flow after dividend distribution, whatever is the free cash flow that goes into 2 streams. One is basically -- one is private equity, unlisted space; and second is the listed space, which is through our own AMC. So both of them, they keep -- I mean there is enough commitment on to the AIF floated by private equity and public -- I mean public mutual funds and all. So there is -- there are a lot of opportunities to invest in all this. And we keep looking for a very strategic opportunity, so the liquidity, and we are also mindful of the liquidity of the investments. So if there is a need -- if the need arises for 100 million -- INR 500 crores, INR 1,000 crores to be invested in some operating business or any business opportunity, the fund should be available to -- should be available at finger tips to use that. So that's the broad objective. And as we go along, we are thinking of adding more vehicles of investing in the market, in private as well as in public side. So broadly, it is -- after -- whatever is left after dividend, that will go into the markets.

The next question is from the line of Madhukar Ladha from Elara Capital.

Congratulations on a good set of numbers. First, a couple of ones on broking. So the market has been very supportive in the last 1 year, and we've added a lot of employees, and our costs have also gone up. I just wanted to understand what is our fixed variable sort of cost structures? In case the market is not supportive, what sort of cost-cutting we could do and some color around that will be very helpful. Second, if you could give the revenue mix between cash and F&O. And there's an increase in these other distribution assets. Now that's almost 28% in the mix. I just would like to know what that is.

Yes. So coming to the question of the fixed cost in the brokerage business. So actually, in our broking business, as you see, there is an overall fixed cost between INR 40 crores to INR 45 crores a month. That is our fix costs at which we are operating. This basically the fixed people cost and the administrative costs in this business. As you're aware, we also have a large portion of our business from franchisees, which is our variable mix on the overall P&L.

So your line is not clear, maybe you would come a little closer to the mic or something. I can't hear you properly. Sorry.

Yes, sure. So I will repeat it. In our broking business, there is a fixed cost between INR 40 crores to INR 45 crores a month, which is the total fixed cost for the people cost and the administrative cost side, which is there. The rest of the expenses are variable in the sense that our revenue sharing with our business partners is variable. And we also have a variable portion of the employee cost, which is there. So today, as we stand, we have about INR 9,200 crores a month of revenues and about INR 40 crores to INR 45 crores of fixed cost a month. That is the operating metrics, which is there. And the rest are the discretionary costs to our team. That was the answer to your first question. I think -- can you repeat your second?

Second question is on the mix between the cash and the F&O. This was 50% in terms of revenue. And your third question is on other asset in distribution product mix, right? So that is -- yes, so that is mostly debt-related product like we have MLD and some debt products. So that is a part of other product mix.

Is it -- does the insurance also come there?

No. So this is not getting counted in AUM, even though we have received a very good response this year in terms of insurance. So almost INR 40 crores of premium business we did in this year.

Understood. So if I got the number correct, PMS still saw outflows of INR 10 billion in the last quarter?

PMS, yes.

Yes. Yes. Can you explain what's actually happening on the ground. Markets have sort of recovered, there was a little bit of consolidation in the fourth quarter. And in general, the sentiment has been good apart from the last probably 15 days of March. So why are we seeing outflows?

So if you look at the overall alternate assets and the outflows less than that is probably between INR 8 billion and INR 9 billion, more like INR 8 billion of outflow because what is happening is that AIFs have gained importance and have replaced PMS sales to some extent, right? That's point number one. Point number two, the HNI segment, which is a larger customer of the alternate assets, is obviously more conscious about the fact that markets have gone up and there are risks and uncertainties. And we are seeing a lot more activity there across the board in terms of profit booking. In our own alternate asset case, a lot of the AUM came in 2017, '18 when we had a 6-year exit load, which is now over. And so sometimes that could also be a motivation, which is specific to us. And finally, it could be our own relative performance versus peers. These are the sum total of all of these factors that have contributed to the number that you saw.

Right. Right. And what's your sense, how do you think this will play out? I know it's not -- it's hard to predict this. But when you think this entire exit load phenomena will sort of get over or people in the PMS side, they'll continue -- they'll continue to stick on.

I think that would be the least important of all the variables that I cited, right? But having said that, I think, comfort with market, our loan performance, right, our traction -- data traction may have -- because you must be aware that AIFs required SEBI approval and there are -- the same product gets registered with SEBI for different distributors. So it's a lot more operations and regulatory approval-intensive. So to make the whole machine well-oiled, and it all started in the second half of the fiscal year, will take a little while. But we are quite hopeful that we should be able to turn this trend around, and there's some uptick in the performance.

Yes, actually, the line actually is very unclear. So I did not get that. Maybe I'll take this offline. I'm struggling with my line probably.

Yes. Sure. Sure, Madhukar.

[Operator Instructions] The next question is from the line of Rajkumar V., individual investor.

Sir, my question is on the brokerage revenue. Congrats for the support growth that's shown. I just want to know given the margin requirements are going to be more strict in go forward, so how do you see your brokerage revenue in the next 2 to 3 years? So will you be able to see a double-digit growth or you're going to see some pressures here?

So I think this -- so last year has been a very good year, as you know, and this new regulations on margin came in from October and then December, so the first 2 things, there was no impact because the market momentum was on site. The March came the next impact where we have seen some fall because of the margin requirement. We have got 2 more slides in June and September. Surely, there will be impact on the F&O because that was where the option side where there was a huge turnover happening based on the inquiry margins where the feed margins are coming into picture. But I see that going forward the cash market will improve, the volumes will improve there. And we, as a business, is committed to do business from a long-term perspective and the net additions of new clients, the way the whole penetration is still very low compared to what we can see. So we see that the growth can be there, but natural, the markets will have to be in our favor. If the markets are trending and it's in our side, so surely, we should see growth. But looking at the last year's huge growth. We can see some amount of maintenance going forward for this year and the next year. But potentially, the growth side is very much here. These are all norms. We have seen a lot of regulations, which come into picture. These are short-term triggers. But in the long term, these are all good for the industry. And surely, the quality of the volumes will improve going forward. That's what I think.

So you will be -- I mean my question is, will you be able to demonstrate a double-digit growth in brokerage revenue in the medium term?

We are focusing that, surely, surely. You know that the volatility in the market can surely look at it different. But if the markets are performing, I don't see any reason why we cannot show double digits.

Okay. Sir, just one more question on the dividend part. I mean I know you're showing the superb EPS for the last 2 quarters. So would it be able to come in -- I mean I was just thinking it would be nice if you also increase your dividend yield. I think if your stock should give like between 2.5%, 15% yield on your average market price, that will be good for the long-term industry building interest in stocks.

That's not how we look at it. The way we look at it is the distribution as a proportion of our profits. We have no control over market price, and trying to match some kind of dividend yield on the market size is not the way forward. So I think we have a clearly articulated dividend payout policy of 25% to 35%. And so our dividends will be in that range. Occasionally, in addition to the dividend payout, we also do a buyback like you saw us doing in last year, and we've done it twice since our listing.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Mr. Shalibhadra Shah for closing comments.

Yes. On behalf of Motilal Oswal Financial Services, I would like to thank every investor and participant for attending the Q4 FY '21 conference. In case of any further queries, please get in touch with me or our Investor Relations here. Thank you. Have a good day, and take care.

Ladies and gentlemen, on behalf of Motilal Oswal Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.