MAS Financial - Prioritizing Profitability Over Growth, Geographic Expansion On The Card: Axis Securities

Axis Securities Report

Over the years, MAS Financial Services Ltd. has consistently adhered to its principle of extending credit where due, successfully maintaining pristine asset quality while achieving healthy growth, with a 14% compound annual growth rate in assets under management over FY19-24.

As the company embarks on its next growth journey, the ramping up of the direct distribution network will support MAS’ ambitious growth plans of doubling its AUM over the medium term along side enabling geographic diversification.

However, it would entail higher opex and relatively higher credit costs versus non-banking financial company partner sourcing. The recently concluded QIP should help bolster MAS’ capital position and fuel medium term growth.

We expect MAS to continue delivering a healthy return on asset/return on equity of 2.9-3%/15-16% over FY25-27E. We maintain our Buy recommendation on the stock with a target price of Rs 360/share, implying an upside of 20% from the current market price.

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