MAS Financial Services delivered robust performance with 18.7% year-on-year AUM growth, driven by strong demand across key lending segments. As reported by Mint, the company's Assets Under Management rose 18.7% year-on-year and 4.2% quarter-on-quarter, with specific segments showing particularly strong gains. Salaried Personal Loans (SPL) grew 6.6% to ₹12.6 billion, SME Loans increased 5.8% to ₹52.1 billion, and 2-Wheeler Loans rose 4.0% to ₹57.4 billion. However, analysts at Choice Institutional Equities have lowered their FY27 PAT forecast by 3.2% due to higher provisions, reflecting the balance between top-line expansion and increased provisioning expenses.
Choice Institutional Equities has issued a buy recommendation for MAS Financial Services with a target price of ₹405, according to reports from Mint. The brokerage firm's recommendation comes as part of their investment strategy for the financial services sector. Choice Institutional Equities forecasts Net Interest Margin (NIM) expansion through FY27-FY28, driven by better yields and reduced funding costs, even though current multiples lag peers. The brokerage has set a target valuation of 2.0 times FY28E ABV, suggesting a potential 20% upside from current prices.
MAS Financial Services currently trades at roughly 1.9 times its FY27 estimated Book Value (ABV) and 1.7 times its FY28 ABV, as reported by Mint. This valuation appears more conservative compared to industry peers. Bajaj Finance trades at multiples exceeding 4.5 times P/ABV, while Cholamandalam Investment is usually around 3.0 times P/ABV, highlighting MAS's premium positioning. The wider Indian Non-Banking Financial Company (NBFC) sector faces ongoing competition and regulatory scrutiny, with interest rate changes impacting funding costs, but strong demand for loans from MSMEs and the 2-wheeler segment provides solid foundation for industry growth.
Analysts at Choice Institutional Equities maintain their 'BUY' rating despite the profit pressure, with most brokers recommending 'BUY' or 'HOLD' and setting price targets between ₹380 and ₹420. However, significant risks remain including the sustainability of expected NIM expansion if yields don't rise as planned or funding costs increase. Rapid growth in 2-wheeler and SME loans carries risk of higher Non-Performing Assets (NPAs) if economic conditions weaken, potentially requiring more provisions. The stock has historically seen dips after reports of rising NPAs, showing investor concern over asset quality, while stricter regulations or capital requirements could add further challenges.
