Motilal Oswal Financial Services: Valuation Shifts Signal Renewed Price Attractiveness

Valuation Metrics: A Closer Look

As of 10 Feb 2026, Motilal Oswal Financial Services Ltd trades at a price of ₹795.00, up 2.01% from the previous close of ₹779.35. The company’s price-to-earnings (P/E) ratio stands at 23.59, a significant moderation from levels that previously classified the stock as expensive. This P/E ratio now positions the stock within a fair valuation band, especially when contrasted with its peer group where several competitors maintain considerably higher multiples.

The price-to-book value (P/BV) ratio is currently 3.71, which, while elevated, aligns with the company’s robust return on equity (ROE) of 15.73% and return on capital employed (ROCE) of 18.29%. These profitability metrics justify a premium over book value, but the moderation in P/BV from prior levels signals a more balanced market assessment.

Enterprise value to EBITDA (EV/EBITDA) is at 14.11, reflecting a valuation that is neither stretched nor deeply discounted. This metric is particularly relevant in capital markets firms where earnings before interest, tax, depreciation and amortisation provide a clearer picture of operational profitability.

Comparative Peer Analysis

When benchmarked against peers, Motilal Oswal’s valuation appears more reasonable. For instance, ICICI Prudential Life Insurance trades at a P/E of 68.5 and EV/EBITDA of 71.32, categorised as very expensive. Similarly, One 97 Communications commands a P/E of 150.62 and EV/EBITDA of 223.52, underscoring the wide valuation disparities within the capital markets sector.

Other peers such as Aditya Birla Capital and L&T Finance Ltd are classified as expensive with P/E ratios of 26.04 and 26.21 respectively, slightly above Motilal Oswal’s current multiple. Meanwhile, companies like REC Ltd and Bajaj Housing Finance are rated fair with P/E ratios of 5.5 and 30.54, indicating a broad spectrum of valuation levels within the sector.

This relative positioning suggests that Motilal Oswal Financial Services Ltd is now more attractively priced compared to several high-multiple peers, potentially offering a more balanced risk-reward profile for investors.

Historical Valuation Context

Historically, Motilal Oswal Financial Services Ltd has experienced periods of elevated valuation multiples, particularly during bullish market phases. The recent downgrade from a Hold to a Sell grade by MarketsMOJO on 6 Jan 2026, accompanied by a drop in the Mojo Score to 41.0, reflects a more cautious stance amid changing market dynamics.

Despite this, the stock’s long-term performance remains impressive. Over the past decade, the stock has delivered a staggering 996.93% return, vastly outperforming the Sensex’s 249.97% gain over the same period. Even over five years, the stock’s return of 420.59% dwarfs the Sensex’s 63.78%, underscoring the company’s strong growth trajectory and market positioning.

However, short-term returns have been more volatile, with a year-to-date decline of 7.06% compared to the Sensex’s modest 1.36% fall. This volatility partly explains the recent valuation recalibration as investors reassess risk and reward.

Financial Health and Profitability

Motilal Oswal’s financial metrics support its current valuation. The company’s ROCE of 18.29% and ROE of 15.73% indicate efficient capital utilisation and solid profitability. Dividend yield remains modest at 0.75%, reflecting a focus on reinvestment and growth rather than income distribution.

Enterprise value to capital employed (EV/CE) at 2.68 and EV to sales at 7.06 further illustrate the company’s valuation relative to its operational scale. These ratios are consistent with a firm that commands a premium for quality but is no longer perceived as excessively expensive.

Market Capitalisation and Trading Range

With a market cap grade of 2, Motilal Oswal Financial Services Ltd is classified as a mid-cap stock within the capital markets sector. The stock’s 52-week trading range spans from ₹487.85 to ₹1,097.00, with the current price of ₹795.00 positioned comfortably in the mid-range. Today’s intraday high and low of ₹805.00 and ₹787.65 respectively indicate steady buying interest and moderate volatility.

Investment Implications

The shift in valuation from expensive to fair suggests that Motilal Oswal Financial Services Ltd may now offer a more compelling entry point for investors seeking exposure to the capital markets sector. The moderation in P/E and P/BV ratios, combined with strong profitability metrics, supports a balanced risk-return profile.

However, the downgrade in Mojo Grade to Sell and a relatively low Mojo Score of 41.0 indicate caution. Investors should weigh the company’s solid long-term growth against near-term uncertainties and sector-specific risks.

Comparative analysis reveals that while Motilal Oswal is no longer among the most expensive stocks in its sector, several peers remain at elevated valuations, potentially limiting upside in those names. This relative valuation advantage could attract value-conscious investors looking for quality at a reasonable price.

Moreover, the company’s consistent operational performance and strong capital efficiency metrics provide a foundation for sustainable growth, which may support multiple expansion if market sentiment improves.

Conclusion

Motilal Oswal Financial Services Ltd’s recent valuation adjustment reflects a recalibration of market expectations amid evolving sector dynamics. The transition from expensive to fair valuation, supported by solid financial metrics and a strong historical performance record, enhances the stock’s price attractiveness relative to peers and its own history.

While the current Mojo Grade advises caution, the company’s fundamentals and relative valuation position suggest it remains a noteworthy candidate for investors seeking exposure to the capital markets sector with a balanced approach to risk and reward.

Investors should continue to monitor valuation trends, sector developments, and company-specific performance to make informed decisions in this dynamic market environment.

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