MAS Financial Services (MFSL) has delivered impressive market performance with a 9% gain over the past month, significantly outperforming the 2% gain in the BSE Financial Services index. According to reports from The Economic Times, the mid-tier micro, small and medium enterprises (MSME) financier reported double-digit growth in disbursement and improving margin profile. The company posted double-digit year-on-year growth in AUM, revenue and net profit for the December 2025 quarter as well as for the first nine months of the current fiscal year (FY26).
The company has set an ambitious target to reach ₹1,00,000 crore in consolidated assets under management (AUM) by 2036 from ₹14,641 crore at the end of December 2025. As reported by The Economic Times, this growth will be driven by loan segments including MSME, vehicles, and housing. The management has guided for 20-25% AUM growth and return on assets (RoA) of 2.75-3% in the medium-to-long term, with the company achieving an RoA of 2.9% in the December quarter. The management's cautious approach to demand revival in the loan market with focus on asset quality implies the company would not indulge in high-risk bets while chasing targeted loan growth over the next decade, which will require an annual AUM growth of 30-35%.
MFSL operates across India through 208 branches, with the top four states including Gujarat, Rajasthan, Madhya Pradesh and Maharashtra hosting nearly 88% of the branches. According to reports from The Economic Times, the company has tied up with 215 business partners to accelerate loan book growth over the next decade. On a standalone basis, the company has five loan segments including micro enterprises, SME, 2-wheelers, commercial vehicles and salaried personal loans, with micro and SME segments forming three-fourth of the standalone loan book of ₹13,782.3 crore. The company also has a rural housing finance subsidiary, with the partnership strategy considered a major catalyst in accelerating the loan book growth.
The company's AUM increased by 22.5% year-on-year to ₹859.2 crore or 6% of the consolidated AUM in the December quarter, as reported by The Economic Times. Axis Securities has raised the stock price target by nearly 7% to ₹405, noting that the company is expected to benefit from continued downward repricing of borrowings with incremental cost of funds (CoF) ranging between 9-9.25% versus 9.5% for the December quarter. Analysts have maintained a 'buy' rating on the stock citing attractive valuation amid improving return ratios and double-digit AUM growth. The management expects another 10 basis point reduction in CoF for the March quarter, with current valuation offering scope for meaningful re-rating on the back of steady performance.
The asset quality ratio has increased in each of the 10 quarters to 2.6% in the December quarter from 2.1% in the June 2023 quarter, as reported by The Economic Times. The management has indicated a cautious approach to demand revival in the loan market with focus on asset quality, implying the company would not indulge in high-risk bets while chasing targeted loan growth over the next decade. This strategy is critical given the rising trend in gross non-performing assets (GNPA), with the company expecting another 10 basis point reduction in CoF for the March quarter. The company's approach balances growth ambitions with risk management, positioning it well for sustainable expansion while maintaining financial stability.
