Choice Institutional Equities Maintains Buy Rating on MAS Financial Services, Sets Price Target of Rs 405

MAS Financial Services Reports Strong AUM Growth Across Key Segments

MAS Financial Services (MASFIN) has posted a notable increase in Assets Under Management (AUM) across its 2-Wheeler, SME, and Salaried Personal Loan (SPL) segments. According to a recent report by Choice Institutional Equities, the company's total AUM grew by 18.7% year-over-year (YoY) and 4.2% quarter-over-quarter (QoQ).

Breaking down the AUM growth by segment, the SPL segment saw a significant increase of 6.6% QoQ and 21.6% YoY, reaching INR 12.6 billion. SME Loans also grew by 5.8% QoQ and 15.8% YoY, reaching INR 52.1 billion. The 2-Wheeler Loans segment posted a growth of 4.0% QoQ and 35.4% YoY, reaching INR 57.4 billion.

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Choice Institutional Equities has revised its FY27E/FY28E Profit After Tax (PAT) estimate for MASFIN, downward by 3.2% and upward by 0.1%, respectively. This revision is driven by higher provisions partially offset by a higher Net Interest Margin (NIM) margin. The report expects the NIM margin to expand over FY27E–FY28E, driven by an improvement in average yield and a reduction in Cost of Funding (CoF).

MASFIN Valuation and Outlook

The report values MASFIN on its standalone lending business, at 2.0x FY28E Asset-Based Valuation (ABV), indicating a 20.0% upside from the current level. Choice Institutional Equities retains its BUY rating on the stock, with the stock currently trading at 1.9x/1.7x Price-to-Asset-Based Valuation of its FY27E/FY28E estimate.