MOSL: MAS FINANCIAL SERVICES (Buy)-Healthy AUM growth; Asset quality stable
MAS FINANCIAL SERVICES: Healthy AUM growth; Asset quality stable
(MASFIN IN, Mkt Cap USD0.4b, CMP INR559, TP INR700, 25% Upside, Buy)
- PAT grew 28% YoY to INR416m (4% miss), driven by healthy AUM growth and stable asset quality, offset by margin compression. While operating profit was in line with estimates, higher credit costs and tax rate resulted in marginal PAT miss.
- Disbursement growth was 9% YoY v/s 30%+ YoY in the past two quarters. Consol. AUM grew 8% QoQ/29% YoY to INR55.6b. MEL and SME lending continued to drive loan growth (+30% YoY each). Interestingly, the 2W loan book declined 9% sequentially as disbursements in this segment were calibrated.
- Total income grew 20% YoY to INR1.02b vs AUM growth of 29% YoY. NIM compression of 70bp YoY was driven by higher cost of funds (+15bp YoY to 8.56%) and increase in leverage (debt/equity up from 2.5x to 3.1x YoY).
- Borrowing mix changed marginally as the company migrated from short-term bank borrowings (cash credit) to term loans from banks. The share of cash credit declined from 36% to 29% QoQ, while that of term loans increased from 12% to 18% QoQ.
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.
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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