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We attended MMFS’s CPC, branch, and tractor dealer visits, where the management showcased Project Udaan, the MTezz app, and the Samur.AI stack. Tech-driven processes have reduced in-principle approvals to under 20min and end-to-end TAT from 8–10 days to 1–2 days.

Key takeaways:

1) Wheels onboarding reached 100% on MTezz in 1QFY27, enabling digitized lead management, improved FOS productivity, strong tractor traction with 32% NTC customers (vs 20% industry), and moderating repossessions (2–3%).

2) Twin CPCs (Airoli and Hyderabad) and Samur.AI have halved costs, while scorecard underwriting and vernacular AI bots have improved collection efficiency (from 70% cash to 75% digital), while managing doubled contract volumes with flat headcount.

3) Branch capacity has shifted from back-office processing to crossselling 8 financial products. MMFS remains well-placed for sustainable growth, supported by gains in operating leverage, asset quality, and distribution efficiency. We retain BUY and Sep-27E TP of Rs450, implying FY28E PBV of 2x

Digital initiatives gaining ground

Project Udaan has transitioned MMFS into a standardized, digital-first lending platform. Wheels origination is now 100% on MTezz (integrated with digital KYC, VAHAN, and Account Aggregators), reducing first-offer TAT from 7–8 days to under 20min and loginto-disbursement from 10–12 days to 1–2 days (~85% of cases). Underwriting leverages 13,000+ BRE rules and 30 years of proprietary data to deliver firm POS offers for underserved buyers (32% NTC vs 20% industry), driving >45% tractor disbursement growth. Twin CPCs complete 200–300+ checks in 2–3 hours, while Samur.AI verifies ~70% of files across unstructured and vernacular records, halving cost per file and trimming CPC headcount from ~880 to ~460 despite higher volumes. Collections have shifted from 70% cash to 75–77% digital (new e-mandates at 85–90%), with vernacular AI bots helping manage doubled active contracts over two years with a flat workforce.

Reshaping branches into lean sales hubs

Operational centralization through the CPC architecture has transformed MMFS’s ~1,300 branches into lean sales and cross-selling hubs (~2.5 staff per branch; branch network already PAT-positive). Freed from routine processing, branch personnel and cashiers now carry active sales targets across ~150k–200k walk-ins, expanding distribution across eight products, led by insurance (~Rs9.5bn premium in FY26), doubled FD mobilization over two years, and personal loans (Suvidha and PL Next). This shift accelerated growth in non-interest income, with fee and commission revenue growing ~40% yoy in 1QFY27. Further, the impending merger of the housing finance subsidiary will add ~300 branches, providing operating leverage as MMFS extends its centralized underwriting, digital workflows, and cross-sell model across the enlarged franchise

Structural transformation underway; reiterate BUY

Project Udaan and Samur.AI are creating structural advantages for MMFS by compressing TAT, strengthening underwriting, and enabling branch-led cross-selling to improve operating leverage and fee income. Backed by dealer conversion and productivity gains, we reiterate BUY with Sep-27E TP of Rs450 (implying FY28E PBV of 2x).

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