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

Good afternoon, ladies and gentlemen. I'm Michele, the moderator for this conference. Welcome to the Quarter 2 FY '24 Earnings Conference Call for Motilal Oswal Financial Services Limited. We have with us today Mr. Raamdeo Agrawal, Chairman; Mr. Motilal Oswal, Managing Director; Mr. Navin Agarwal, director, and CEO, AMC; Mr. Ajay Menon, CEO, Broking; Mr. Ashish Shanker, CEO, Wealth Management; Mr. Sukesh Bhowal, CEO, Housing Finance; Mr. Shalibhadra Shah, Chief Financial Officer; Mr. Chetan Parmar, Head, 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, Mr. Agarwal.

Yes. Good afternoon, friends. It is my pleasure to welcome all of you again to the second quarter ending March '24 conference call. I want to take this opportunity to wish all of you a very happy upcoming Diwali season and a fabulous new year. Let me now take you through the key highlights of our performance. We reported an overall half yearly profit, including OCI, of INR 12.27 billion, which is up by 130% year-on-year. Our consolidated revenues for the second quarter stood at INR 14.16 billion, up by 30% year-on-year. Consolidated operating profit after tax during the second quarter was at INR 2.88 billion, up by 26% year-on-year. Net worth stood at INR 74.6 billion, up by 25% year-on-year. And our fund-based investment book stood at INR 54.7 billion, with a cumulative since-inception XIRR of 17.5%. Turning to our segmental performance, starting with the capital markets. We have the highest-ever quarterly capital market business profit after tax at INR 1.8 billion in the quarter, up by 33% year-on-year, led by continued traction and improvement in our market share across the cash and the future and options segment. Our retail cash ADTO market share grew by 121 bps year-on-year and nearly 90 bps quarter-on-quarter to 7.1% now. Our retail F&O premium market share stood at 7.5%, up by 30 bps quarter-on-quarter. Retail F&O ADTO market share grew by 74 basis points year-on-year and by 26 basis points quarter-on-quarter to 4.6% this -- and our overall ADTO grew by 137% year-on-year and 27% quarter-on-quarter. NSE active clients stood at 7.98 lakhs as of September end, and the market share was 2.4%. We acquired 191,000-odd clients during the second quarter. Our distribution AUM grew by 24% Y-o-Y to nearly INR 25,000 crores. And our distribution net sales were about INR 6.19 billion during the quarter. Our investment banking business has completed 8 deals during the second quarter. Turning to asset and wealth business. Our profit after tax was flat at INR 682 million mainly due to low AIF upfront income because of change in AIF regulations in April '23 and also increase in employee cost on account of continued RM hiring in the wealth management business. Our asset management business across mutual fund, PMS and AIF stood at INR 551 billion, up by 18% year-on-year. Our revenues for the quarter stood at INR 2.5 billion, up by 8% year-on-year. Mutual fund AUM stood at INR 358 billion. Strong performance across our active mutual fund schemes resulted in 110% Y-o-Y growth in our gross sales. We added 210,000 new SIPs during the second quarter. This was up [ nearly 3x ] year-on-year and up by over 60% quarter-on-quarter. And our SIP flow market share improved by about 0.5% on a year-on-year basis. Wealth management AUM grew by 91% year-on-year to INR 733 billion as on end of September. Strong net sales of INR 23 billion in the second quarter was up by 66% year-on-year. Our wealth business revenues grew by 11% year-on-year to INR 571 million. Private equity fee-earning AUM stood at about INR 98 billion across our private equity growth and real estate funds. In second quarter, revenues grew by 18% year-on-year at INR 461 million. We are pleased to share also the launch of our sixth real estate fund, adding to our diverse investment product suite. Turning to the home finance business. Our focus continues to be to meaningfully ramp up our sales force and also simultaneously improve the productivity of the sales force. During the second quarter, we've expanded our sales team by onboarding 187 net sales RM, taking the total count to 629. We would like to grow this RM count to 1,000 from 629 by March '24, in another 5 months' time. Our efforts to boost productivity started yielding results. 80% of our log-ins are now approved within a span of 2 days. Additionally, our "log-in to sanction" ratio has shown an improvement of (sic) [ to ] 42% in second quarter compared to 36% in the first quarter. Moreover, we've taken significant steps to ramp up our sales distribution framework. This includes setting up of a dedicated team catering to small and large distributors, direct sales, ensuring more efficient approach to our overall sales process. The housing finance business profit stood at INR 328 million in the second quarter. And disbursements during the quarter were at INR 2 billion, up by 112% quarter-on-quarter. Our objective is -- as we grow the sales team meaningfully to 1,000 count by March '24, on a quarter-on-quarter basis, this INR 2 billion disbursement number, in the coming quarters, should meaningfully ramp up. Our AUM stood at INR 37.2 billion. And with the growth in disbursements after staying flat for a few years, we hope to grow the AUMs also strongly. I'll spend the last few minutes on how we look at the larger opportunity for the Motilal Oswal Financial Services firm, what choices we are making to tap this opportunity and the milestones we are setting for ourselves for the foreseeable future. The big picture, as we see, it is very exciting for the overall financial services business and specifically for each of our businesses. Over the last 25 years, India generated gross savings of about $13 trillion. As per a study done by us, we expect this to rise meaningfully to over $100 trillion in the next 25 years, led by various factors, including an ascent in India's rank to top 3 with a GDP of nearly 10x of the current size. We expect this to [ throw up ] exponential opportunities for our capital market, asset and wealth businesses, in fact each of our businesses. By the context, retail participation has increased immensely over the last decade with a strong addition in demat accounts, which have grown nearly 3x in the last 3 years itself. This has led to a strong growth in retail broking ADTO which has grown by nearly 12x in the last 3 years. Motilal Oswal, with its digital strategy, provides the best of both the worlds to its customers. During this 3-year period of strong 12x growth in the market ADTO, we have in fact been able to grow our market share by 1/3 from 3.6% 3 years ago in September '20 to 4.6% now in September '23. Our retail market -- cash market share during this time period has gone up from 5.4% to 7.1%. In FY '23, the fiscal year ending March '23, Motilal Oswal has ranked among the top 3 in terms of brokerage revenues, after Zerodha and Angel. And our focus remains, with all the initiatives that we are taking, to further improve our market share in this rather fast-growing market. With over 2,500 experienced advisers on our own roles, who apart from broking offer a bouquet of financial services solutions, our distribution AUM has also grown strongly at a 30% CAGR in the last 3 years from INR 11,000 crores in September '20 to over INR 25,000 crores in September '23. On a large client base of over 4 million clients, the current cross-sell ratio stands at 106% and is a focus area for us. We are in the process of strengthening our team meaningfully here too, with an objective of ramping up the AUM from the INR 25,000 crore number in the coming years. With persistent efforts of the Indian distribution community and AMFI, we have witnessed strong growth in industry SIP flows and mutual fund [ AUM too ]. In the last 7 years, the monthly SIP flows have grown at a compounded 23% per annum and hit a record high of INR 16,300 crores in the last month that means -- in the last month of September compared to a mere INR 3,000 crores 7 years back. We believe our asset management business is well positioned to tap into this opportunity. Our QGLP investment philosophy with clear focus on high-quality, high-growth investments has been reoriented to deliver sustainable performance from highest performances earlier. This has resulted in improved fund performance across the board, in turn driving the strong flows and market share in both the mutual fund and the alternates side. The net sales of our mutual fund business turned positive, backed by top-quartile performances across schemes like mid-cap, large and mid-cap, balanced advantage fund. Our market share for the month of September for our large and mid-cap fund was at nearly 4%, and for our mid-cap fund was nearly 8%. The overall market share of the firm stands at a tad under 1%. And as you may have seen through the presentation, we have -- we look to at least more than double this market share in the coming quarters. We've also seen -- this will be supported by a strong recovery in our flagship scheme. Our flexi cap, on a 1-year basis, now is generating positive alpha. Also in our SIP side, we have seen our market share grow from 0.9% to 1.4%; and there too the drive is to take this market share up meaningfully higher. On the alternate side, 16 out of the 19 products that we manage for clients have outperformed the benchmark. And here again our aim is to get back to the leadership position [ in the alternates ] space. Our volumes for AIF has picked up in the second quarter post the regulatory changes where there was a ban on upfront revenues in the first quarter. Our thematic [ fund founder strategy ], which was launched just 2 quarters ago, has already garnered an AUM of over 1,000 crores and has been [ impaneled ] by various retail and wealth platforms. Further, we have seen onboarding by the top 3 retail banks of India, for our AMC products, in the recent past; and hoping to meaningfully ramp up our AUMs in the coming quarters with these banks. Turning to our private wealth business. We have clearly laid down our strategy to strengthen the relationship manager base, in FY '21, to reach 300 RMs by March '26. We are on course for that plan and have added 39 RMs over the last 6 months, to reach a RM count of 221 as of September '23. This number was 128 3 years back. Investments in RM has brought down our profit margins to -- operating profit margins to 25% compared to historical trend of 45%. We expect to recoup these margins in the coming years as the newly onboarded RMs turn profitable. Just one final context. The net worth of the Motilal Oswal Financial Services firm has grown at a 23% compounded rate over the last 8 years, and this is after an average dividend payout during this 8-year period of 26%. Our focus to increase the net worth compounding led by the turnaround in the asset management business performance, the home finance business performance, the private wealth improvement in margins and the investment banking business performance, coupled with the improving IRR that we hope to achieve in our investment book through the reallocation that we've proposed, make us very excited about continued growth in net worth at a similar, if not higher, pace than the 23% compounding in the last 8 years. We remain excited overall about all our businesses. And we are now open for Q&A. Thank you.

[Operator Instructions] The first question is from the line of Namit Arora from Indgrowth Capital.

Yes. So I have 2 questions. 1 was around private wealth, which is the sunrise sector. So we are given to understand that there's a very attractive private wealth opportunity even in Tier 2, Tier 3, Tier 4 towns; and sort of the Bharat in India, so would be grateful for your thoughts on your strategy, if that's a priority for you, Tier 2, Tier 3, Tier 4. What's your strategy in private wealth to capture that opportunity? And sir, my second question was around the broking business. Would be grateful for your thoughts on the discount broking opportunity; and given that your institution has had a very razor-sharp focus on equity over many decades, if there is a plan to leverage that. And the way you intend to approach the broking opportunity if, at all, discount broking is of interest.

Yes.

Yes, yes. This is Ashish Shanker, private wealth. As Navin mentioned in his opening remarks, we are adding bench strength in terms of RMs in the private wealth business. Now these RMs are also being added in Tier 2 towns. Like you rightly mentioned, there is a lot of liquidity events and well creation happening in towns outside of the major metros, so we've added Mysore this year. We've added offices in 3 other locations in Gujarat. We will be adding offices in UP very soon. Similarly, we've added an office -- I mean we will be adding an office in Indore. We are looking to onboard somebody in Raipur, so we have a -- whilst we are adding bench strength, some of that bench strength is being added in Tier 2 towns. So we are cognizant of the opportunity and we'll be looking to capitalize on it.

We'll take the next question from the line of Kunal Khudania from DSP Asset Managers.

This is Vivek Ramakrishnan. I had a couple of questions. First, on your housing finance business, where you're hiring but the AUM, if you see, quarter-on-quarter has been pretty stable. In fact, if you take it from the March quarter, it seems to be lower only. And you can see that, so how does the cost-to-income -- and when does the business become, achieve greater scale? And any commentary on the GNPA and NPA numbers? So that will be question number one, on the housing finance. I'll also ask a question on the other business. In the capital -- the wealth management business, we see that your interest income has gone a -- gone up a lot. Is it because of growth in loan size? Because if we subtract it from the total loan size, [ if you see ], there seems to be a [ big, large ] portfolio. So could you tell us any color on how big this is going to get? And I mean, where do you expect that to end?

So on the housing finance side. So overall, as we said at the start of the call -- so actually the idea is to ramp up our sales engine. And actually, in quarter 2, we've added almost 190 sales RM. And there's a strong plan to add RMs, which would improve our throughput of disbursements. So, so far, if you see, overall quarter-on-quarter, our disbursements have gone up from almost 93 crores in Q1 to 193 crores in Q2, so there is certainly improvement in our monthly run rate of disbursements; and the corresponding AUMs would also tend to grow up in line with that. On the cost-to-income side, question was -- so basically there the cost-to-income would marginally go up given that we are in hiring phase and investment mode in this business. However, that would -- if you see, our other revenues have also started increasing, which would more than compensate this proportion once we -- our -- the investment completes in the next few months. So that extent, you will see the overall ROA getting stabilized. And coming to the asset quality: On quarter-on-quarter basis, there is improvement in the overall collection efficiency. So quarter 2 is only -- starts off at a lower efficiency. However -- quarter 1 starts at a lower efficiency. And quarter 2, we have catch up with the efficiencies; and the asset quality is very stable. And we expect to maintain the gross NPA levels below 2% and net NPA levels below 1.5%. That is on the overall housing side. And coming to the question on the NII on our capital market side of the business. So there is certainly a ramp-up of our lending book that has happened on a year-on-year basis and which has led to improvement in the NII and the overall activity improving at the overall active clients level as well, so the plan is to keep this overall -- as our equity has also been growing, if you see Y-o-Y, at 25%, on year-on-year basis, and even 23% CAGR over last 8 years -- so our -- that gives us a headroom to actually leverage and take the opportunity of those HNI clients where we can lend this money. And that's one of the reasons where we have focused to ramp up this number. So we would be maintaining this overall leverage within the overall 2x ex housing covered, so accordingly we'll be growing with that number in mind. That's the point.

[indiscernible].

To answer on the discount question [ will be ] last -- well, actually the -- one of the last questions was on the discount opportunity, so actually -- so given that our -- overall we have been -- our strength is on advisory side of the business. So we have built the business for advising to our customers. And we have one of the largest number of advisers in our retail broking business, so we don't have any plans to go to the discount way, in fact, because there's a lot of focus to improve our distribution and overall NII, along with the brokerage revenues, where advisers would not only do broking but even do cross-selling of all the third-party distribution products where we are actually ramping with a lot of team. So there is no plan of us to go on the discount side of the broking.

Right.

So just, sir, on home finance. Your AUM has not increased despite the fact that you're saying that disbursements have increased. Is it that the runoffs and disbursements are just matched with each other? Or are you seeing some business transfer out? Or so when do we see the jump in AUM? I mean you're hiring people, so -- I mean like I don't know whether you give a guidance, but if you look at March '24, where would you see the AUM in housing finance business?

So firstly, I think, March '22 to March '23, if you see last financial year, the AUM has grown by 10%. Coming to the current financial year: So we have a component of almost 14% of the construction finance book on our portfolio, and in quarter 2 of this year, there is more prepayments of that part of the loan because of the faster inventory sell-down. And to that extent, there is almost 50 crores of higher prepayment which will happen on the construction finance side of the book. That is one of the reason. However, retail book has actually grown on quarter-on-quarter basis.

[Operator Instructions] We'll take the next question from the line of Namit Arora from Indgrowth Capital.

I had just one more question. This was to Sukesh given that Sukesh and Shobhit and Rajesh and the team are building the business probably as a sort of fresh charter, new charter. I'm interested in Sukesh's thoughts on positioning in terms of your focus, let's say, ticket size, products, geographies given that housing finance is a very large opportunity. So some thoughts on strategy and how you're prioritizing your time management, bandwidth and capital given that it's also a very competitive space.

Yes. Thanks, Namit. The strategy right now is to improve our sales and distribution bandwidth. And we have a -- I mean we have -- right now we had an average sales FOS of only about 500, which is very small compared to the competitors. And we are focusing on ramping that up to reach a level of 1,000 FOS by the end of the year. And currently the strategy is to ramp up this FOS only in the existing branches, which is, I mean, our branches -- we have about 110 branches that's spread across the country. The focus remains on the affordable housing space at the moment because that's where the larger opportunity arises, is existing. And the focus of all the prime -- major banks is on the salary segment, where the yields and the NIMs are much lesser, so our focus remains on the affordable segment, where the NIMs are higher and the opportunity is much larger and the competition is also lesser -- less intense. So we expect to thrive in that segment, for the moment, and grow our disbursement run rate to a much higher level in line with the growth in our team size. That's the short-term and near-term plan as of now.

We'll take the next question from the line of Kajal from ICICI Securities.

Sir, congratulations on a good set of numbers. I -- sir, a couple of things. So right now we are seeing ASBA earlier was planned on only UPI platform, and now it is expected to be in a different fashion. So you see any impact there? And secondly, second question, on recently SEBI has spoken about exchanges pass-back [ thing ] which is getting passed on to the brokers. So what is the amount that we get as a pass-back? And what can be the impact of this in future?

So coming to the first point [ of the ASBA ]. I think implementation is going to be very slow, and it is not going to be compulsory to start off [ with ]. And with the RBI implications on UPI and all, I think the impact will be comparatively very low, as far as what we feel. And for the clients if -- which we are managing, I don't think we'll have a big impact on that as well. Coming to the discount on the transaction charges, I think it's still a discussion thing which [ NSE and ] SEBI has to come back on, but if you look at our overall number of [ orders ], the impact will be comparatively lower for us because we are looking at much high-value clients. So the impact from that will be much lower compared to the discount brokers to that extent.

And sir, how does this pass-back work for a broker generally? It is basically number of orders, value...

So basically what happens is that there is a slab system from the exchanges. So the client is charged at the highest slab, whereas the broker gets charged at the lowest slab the moment he crosses [ X volume ], so the difference is to the credit of the broker. So typically, for discount brokers, this number becomes very high. So they are getting the benefit of it from the -- being charged at the lowest slab, whereas the slab -- they charge a client at the highest slab.

The next question is from the line of Hitesh Gulati from Haitong Securities.

Sir, my question is on the capital market segment. So if you look at the operating expenses here, especially employee expenses and commission expenses for the quarter, they are up by 30% plus, almost in line with brokerage revenue which is also up by 30% plus, so can you throw some light on what we are exactly trying to do here? Because we are adding a lot of employees in this segment and commission expenses maybe is linked to brokerage revenue. The second question, sir, is on the interest income again. Our interest income is up by 90% (sic) [ 19% ], so is this mainly due to the margin funding book accretion? And if you can throw some light on this as well.

Yes.

Yes -- sorry. Your second question, on interest, if you could repeat...

Sir, interest income is up by 90% (sic) [ 19% ] for the quarter in the capital markets segment, the broking segment...

Yes. So what's the question on that?

Sir -- so can you throw some light on the margin funding? Because this 90% (sic) [ 19% ] increase is quite high. So just wanted to understand. Is this due to yield increase here? Because cost of deposits has also gone up. So there is yield -- substantial yield increase. Or is there a substantial increase in the size of the book?

Yes, sure. So addressing to your first question: So actually revenues in the business have actually grown by 41% on a year-on-year basis, while broking revenue has grown by 32%, so -- and with this revenue increase of 41%, the people costs have actually grown by 31% in our business. Now this 31% growth also includes upfronting of the provision for our variable payouts which we have actually embedded in quarter 1 and quarter 2 of this financial year given the strong performance of this year. So that is also one of the reasons where you will see a bit of higher proportion of the people costs coming in because of the higher revenues on our investment banking business as well as institutional equity revenues on the broking side. Also we continue to invest in talent, especially on distribution side of the business and on the -- on our PCG channel, because of which we have been adding more senior talent also overall on a last-12-month basis. That is also one of the reasons for increase, but overall, operating leverage-wise, it is up by almost 300 basis on a Y-o-Y basis. So if you look at our capital market segment, if you calculate the operating leverage on the net revenue basis, that is up by 300 basis on Y-o-Y. So we'll continue -- despite investing, we are continuing to improve our operating leverage as well. Coming to the interest point. Interest income is up 19%. This includes, of course, increase on accounts. So marginally, the NIMs are up on a -- in this quarter, so we have passed on impact of our interest increase. In last 2 quarters, we have been passing on that impact. And in Q2, we have actually improved our NIMs by almost 65 to 70 basis points on our interest lending book. The lending book comprised of certainly the margin trade financing book, basically, where there is -- on a Y-o-Y business, there is increase in the growth of this book. The book has almost sort of increased -- or doubled given that, earlier, we were doing IPO financing. And that opportunity is not there now, so given our strong balance sheet and net worth growth, again this gives us opportunity to leverage. And that is one of the reasons where we have increased our lending to HNI clients, especially on our -- the private client group channel and the franchisee channel. That is resulting in increasing in our interest income.

[Operator Instructions] We'll take the next question from the line of [ Vignesh Iyer from Sequent Investments ].

Sir, 2 questions from my side. First is on the home finance side of the business, just wanted to know. We seem to be stabilizing in this year, and -- but the sector we cater to, affordable housing, is showing a lot of traction, so what kind of AUM growth can we expect from FY '25 onwards? Yes. And second question is our cash balance of -- is around...

I'm sorry to interrupt. [ Mr. Iyer ], your audio is not clear. May we request you to use your handset, please?

Yes. I'm using handset...

Sir -- but your audio is not that clear. It's difficult to understand.

Hold on a second.

Okay.

Yes, all right. Is this clear [ now ]?

Yes, sir.

So second question on my side is our balance sheet shows cash of around 13,500 crores roughly. Can you tell me, how much of that cash actually belongs to the company? And what is the cash that belongs to the -- our customers?

Yes...

[indiscernible] question...

Yes.

Yes. Thanks, [ Vignesh ], for your question. As we mentioned earlier, we are ramping up our sales force from around 500 at the start of the year to end at 1,000 by the end of the year. And we have been -- despite the fact that we've added a lot of people, we have been able to maintain our productivity. And we are -- of course, in Q2 itself, we have seen our disbursement grow in line with the added investment. And with the further maturing of our -- stabilizing of the sales team, we expect the productivity to further improve. And so our disbursement run rate on the retail side should continue to grow in line with the addition of sales capacity. And we expect the AUM to grow accordingly on the retail side, for the next year.

Yes. Coming to the question on the cash and cash equivalents. So at the overall consolidated balance sheet level, INR 2,900 crores of cash and cash equivalent pertains to our own surplus cash on the balance sheet. Rest belongs to our, basically, creditors and the business.

Yes.

Okay, sir, but just -- if you could just give a ballpark number of what AUM growth is possible, like a 20%, 25% AUM growth possible in FY '25.

[indiscernible]...

Yes...

But not giving...

[indiscernible] while we are not giving a guidance right now -- but with the expected growth in our disbursement numbers, we expect a healthy trajectory of growth of AUM in the next year.

[Operator Instructions] The next question is from the line of Namit Arora from Indgrowth Capital.

My question was to Navin-ji, on MOAMC. Would be grateful for your thoughts on efforts to enhance market share besides the growth of the market itself, your thoughts on how you are focused on trying to enhance market share for MOAMC; and secondly, your thoughts on the entire active-versus-passive debate. And does the AMC have a strategy to capitalize on that opportunity as well in a fashion in a more aggressive manner, active versus passive as well as ETFs and other products?

Yes. So as far as our mutual funds are concerned, I highlighted to you that our market share in 2 of the categories where the funds have been doing well for a while has already touched 4% for the large and mid-cap category, 8% for the mid-cap category. This compares with an overall market share of 0.9% in terms of the share of AUM in the total outstanding equity AUM. I also highlighted that we have been onboarded by the top 3 retail banks in the last few months, and that is a process when the -- where the entire banking channels pan-India starts selling these products. Even the larger category, which is the balanced advantage fund category, our fund is among the highest-ranked funds in [ 1-, 2-, 3-year ] time period there. So that's a large category as well. And finally, I highlighted that our flagship flexi cap fund, which was market leader in that category at one point in time, has also on a 1-year basis now started delivering alpha and is in the top quartile of performance. So it is a very broad-based recovery combined with onboarding by both the retail channels, national distributors and IFAs; as well as by the banks and wealth channels. And so that is reflected in improvement in gross flows reflected in the first quarter of positive net sales. We think that we have a long way to go, as far as the ramping up of the market share here. Also I highlighted that bulk of our alternate asset products [ like the founder ] strategy, value migration strategy, the mid-to-mega strategy, business opportunity strategy, the India growth funds -- I mean, across the board, each of the products are performing top quartile. And we are seeing very strong distribution onboarding there too. In fact, for the month of September and October, even in the alternates space, we have seen very strong positive net sales when there is a slowdown in the overall market. So the investment philosophy has been pivoted to more sustainable performance [ than the max ] performances. I highlighted that. This is reflected in the performances of most of the mutual fund and alternate products, also reflected in the onboarding of the products by the various distribution channels. As I speak to you, our sales team size right now is almost 4x of what this team size was when the AUM was similar 4 years back, so we have meaningfully invested in the sales and distribution infrastructure. Also we've opened a lot more new branches. The digital channels are, is contributing a lot more this time around as well. So just by way of context: In the last cycle, you saw the AMC grow from INR 1,000 crore AUM to INR 50,000 crores, led by sustained 5, 6 years of performance. We are hoping that this INR 55,000 crore amount that we've reported for the end of September is the beginning of this journey of the second phase of growth for the AMC. Turning to the passive business. There too we have a leadership position in the international funds with our -- we were the first to launch the Nasdaq and S&P 500 funds. We've followed that up with a few other interesting international products, but after the RBI embargo on incremental investments, we are nearly capped out, as far as that part of the passive business is concerned. And over the course of the last 7 quarters that this embargo has been in place, we launched a lot of interesting domestic passive funds, including factor funds, sectoral funds and so on. We are not really getting into the debate of active versus passive. We believe that there is a lot of headroom to grow both given just how underpenetrated Indian financial savings are in the overall wealth of the Indian family. So equities are currently less than 5% of the wealth of Indian households and this has a lot of headroom to grow, so we are well positioned, whether it's mutual funds or alternates, whether it is active or passive, with strong performances across the board with much larger sales and distribution infrastructure and onboarding by the distribution partners. And we'll see how this shapes up, but the headroom to grow is really meaningful.

Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

On behalf of Motilal Oswal Financial Services group, I would like to thank every participant for attending the Q2 FY '24 con call. In case of any further queries, please do get in touch with us on our investors relations desk. Thank you, and have a good day.

Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Motilal Oswal Financial Services, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.