Improving direct distribution, stable asset quality augur well for MAS Financial Services
MAS Financial Services, a micro, small and medium enterprises (MSME) financer, has gained 16% over the past three months compared with the 1.4% gain in the S&P BSE Financial Services index. The company has been reporting healthy growth momentum in loan assets and a stable asset quality. With a focus on direct distribution, the lender expects to double the loan book every three-four years.
It is likely to cross Rs 10,000 crore in assets under management (AUM) in the September 2023 quarter. In the June quarter, the AUM was at Rs 8,417.8 crore.
MAS offers lending to various categories including micro and SME which together form 84.3% of the loan book while two-wheelers, commercial vehicles, and loans to salaried people comprise the remainder. It has 155 branches across seven states.
The company has a major presence in Gujarat with 60 branches followed by Madhya Pradesh (33 branches), Maharashtra (28 branches) and Rajasthan (25 branches).
The company’s net interest income (NII) increased by 30.8% to Rs 137.3 crore in the June quarter while net profit grew by 24.2% to Rs 57.3 crore. The cost of borrowings (CoB) increased by around 90 basis points year-on-year to 9.7% due to rising interest rates in the economy. The CoB is expected to stay between 9.7-9.8% for FY24.
“Efficient liability management, borrowing from diversified sources, and having adequate sanctions on hand have helped the company manage its cost of funds in a better way as well as protect its NIMs,” mentioned Axis Securities in a report.
