Motilal Oswal - MAS Financial Services (MASFIN) MOSL: MAS FINANCIAL SERVICES (Buy)-AUM growth on track-higher assignment transactions drive PAT outperformance

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Motilal Oswal

Alpesh Mehta

EUR 120.00 For Business Accounts Only

MOSL: MAS FINANCIAL SERVICES (Buy)-AUM growth on track-higher assignment transactions drive PAT outperformance

MAS Financial Services: AUM growth on track; higher assignment transactions drive PAT outperformance

(MASFIN IN, Mkt Cap USD0.4b, CMP INR538, TP INR650, 21% Upside, Buy)

PAT grew 51% YoY to INR461m (30% beat), driven by higher-than-expected assignment transactions (INR7.8b; 16% of opening AUM) and related up-fronting of income (according to the regulation under Ind-AS).
Standalone AUM increased 34% YoY to INR49.1b, driven by 35% YoY growth in micro-enterprise loans (MEL) to INR30.6b. MEL now comprises 62% of total AUM. SME loans stood at INR11.9b, comprising 24% of total AUM.
Borrowing mix was largely stable sequentially. The share of assignment in overall funding stood at 50% versus 49% in the previous quarter.
Cost of funds increased ~25bp QoQ to 9.1%. Incremental cost of funds stood at 9.75% in the quarter. Calculated margins were stable YoY at 8.5%.
Asset quality has been largely stable - GNPL ratio increased by 10bp YoY to 1.3%, while NNPL ratio was stable at 0.9%.

31/01/2019 10 EN

Underlying

MAS Financial Services

MAS Financial Services Limited is an India-based non-banking financial company. The Company is engaged primarily in the business of Financing and all its operations are in India only. The Company is focused on fulfilling the requirements of lower income and middle-income groups of the society. The Company offers various products, such as Micro Enterprise Loan (MEL); Two Wheeler Loan; Small and Medium Enterprises Loan; Commercial Vehicles Loan; Used Car Loan, and Tractor Loan. The Company's Small and Medium Enterprises Loan includes Machinery Loan, Industrial Shed Loan, Working Capital Loan and Loans against Property (LAP). A micro-enterprise under this loan category is usually a small business with a turnover ranging from 25 Lakhs to 2 Crores, engaged into manufacturing, trading or services. The Company's network has over 70 branches in major cities of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Tamil Nadu and Karnataka, through which over 3200 centers are catered.

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INE348L01012 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Alpesh Mehta

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MOSL: MAS FINANCIAL SERVICES (Buy)-AUM growth on track-higher assignment transactions drive PAT outperformance

MOSL: MAS FINANCIAL SERVICES: Regains its mojo with healthy disbursements and stable asset quality

MOSL: MAS Financial Services (Buy)-Growth slows down, but profitability improves

MOSL: MAS FINANCIAL SERVICES (Buy)-Healthy AUM Growth| Spreads under pressure | Stable asset quality

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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