Non Lending Q3 Results Preview - A Steady Quarter Across Capital Market, General Insurance, MF: Motilal Oswal
Long-term growth potential of the non-lending financials given their broader themes of financialisation, digitization of savings.
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Motilal Oswal Report
Capital market activity in India accelerated during Q3 FY23 across most parameters (volumes, orders, etc.), barring client additions. Volumes in future and option – following a weak Oct-Nov-22 – bounced back in Dec-22, though cash volumes remained muted. Commodity option volumes remained strong. However, lower net interest income on margin trading facility book for brokers is likely to result in QoQ decline in profits for brokers.
The general insurance industry’s growth momentum also picked up in Q3 FY23 with 20% YoY cumulative gross written premium growth for Oct-22 and Nov-22. The health segment reported a strong cumulative growth of 35% YoY for the same period primarily backed by 48% YoY growth in group health.
Motor segment too grew strongly at 12.5%/13.8% in Oct/Nov-22, respectively.
The health claim ratios are likely to improve as well due to decline in the number of claims.
Mutual fund assets under management activity for the industry declined marginally in Oct-22 but gathered pace in Nov-22.
While systematic investment plan volumes and positive mark-to-market led to a higher share of equity in industry AUM, debt AUM continued to decline on large outflows.
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