Company Update : MAS Financial Services Ltd by Motilal Oswal Financial Services Ltd
Earnings in line with stable asset quality; AUM rises ~18% YoY
NIM stable QoQ
* MASFIN’s 2QFY26 PAT grew ~17% YoY to INR897m (in line).
* Net total income rose 29% YoY to INR2.5b (in line), while opex was INR897m, rising ~42% YoY (in line). PPoP stood at INR1.6b (in line) and grew 23% YoY.
* Credit costs declined sequentially to ~INR371m (vs. est. of INR437m), translating into annualized credit costs of 1.2% (PQ: 1.4% and PY: 1.0%). GNPA (basis AUM) rose ~5bp QoQ to 2.5%, while NNPA rose ~5bp QoQ to 1.7%. PCR on Stage 3 assets rose ~10bp QoQ to ~41.3%.
* CRAR stood at ~24.6% with Tier1 at ~22.7%.
AUM rises ~18% YoY; NIM stable QoQ
* Standalone AUM was ~INR130b and rose ~18.0% YoY/4.0% QoQ. Within this, AUM of Micro-enterprise/ SME/2W/CV loans grew 10%/17%/30%/18% YoY. Salaried personal loans grew ~70% YoY to ~INR11.7b.
* About 35% of the underlying assets in the standalone AUM were through partner NBFCs. The MSME segment contributed ~60% to the incremental YoY AUM growth.
* Yields (calc.) declined ~10bp QoQ to 14.75% while CoF (calc.) declined ~15bp QoQ to 9.2%. This resulted in ~5bp QoQ expansion in spreads to ~5.6%. NIM (calc.) was stable QoQ at ~7.7%.
Other highlights
* The average ticket size of micro-enterprise loans rose to ~INR88k (PQ: ~INR66k), while SME loans declined to 2.6m (PQ: ~3.5m).
* RoTA was largely stable QoQ at ~2.85% in 2QFY26.
* MASFIN Insurance Broking Private Limited (a subsidiary of MAS Financial) has been granted a Certificate of Registration from IRDAI to operate as a Direct Insurance Broker (Life & General).
HFC subsidiary
* MAS Housing reported AUM of ~INR8.2b, which grew ~24% YoY.
* GNPA/NNPA in the housing segment remained stable QoQ at 0.95%/0.65%
Valuation and view
* MASFIN reported in-line earnings for 2QFY26, supported by healthy AUM growth of ~18% YoY. Asset quality remained largely stable, and the credit costs dipped sequentially. It has a niche expertise in the SME segment, and its asset quality is perhaps the best among (M)SME lending peers.
* The company is well placed to achieve its target AUM CAGR of 18-20%, supported by robust liability management, a strong capital base, and healthy asset quality. We will look to revise our estimates following the earnings call on 6 th Nov’25.
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