🟢 At a Glance
MAS Financial Services Ltd is the retail-focused NBFC stitching together ₹10,216 Cr (9MFY24) of AUM across machinery (45%), SME (36%), 2W (7%), CV (7%) and salaried PL (5%). With 24% CAGR revenue, 14% ROE, and ₹314 Cr PAT in FY25 (EPS ₹17), its 17x PE and stretched capital raise may test investor patience.
🏭 About the Company
Founded in 1995, MAS Financial Services Ltd (BSE: 540749, NSE: MASFIN) is a non-deposit taking NBFC registered with the RBI. It specializes in retail finance for MSMEs, home loans, two-wheelers, used cars, and commercial vehicles.
- Consolidated AUM (9MFY24): ₹10,216 Cr
- Standalone AUM: ₹9,672 Cr
- Product Mix:
- Machinery & Equipment Loans (MEL): 45%
- SME Loans: 36%
- Two-Wheeler Loans: 7%
- Commercial Vehicle Loans: 7%
- Salaried Personal Loans: 5%
MAS focuses on small-ticket, high-yield financing, leveraging a branch network of 300+ locations and a vehicle fleet of mobile loan officers for doorstep disbursements.
👥 Key Managerial Personnel (KMP)
- Mr. R. Selvarajan – Chairman
30 years in financial services; architect of MAS’s rural penetration strategy. - Mr. Muralidharan K. – Managing Director & CEO
Ex-Shriram Finance; drives digital underwriting and credit scoring enhancements. - Mr. Vivek Kataria – Chief Financial Officer
Ex-HDFC Bank finance lead; oversees treasury, ALM, and regulatory compliance. - Ms. S. Lakshmi – Company Secretary & Compliance Officer
📊 Financial Performance Snapshot
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 | 5-Yr CAGR |
|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 627 | 690 | 980 | 1,284 | 1,596 | 24.3% |
| Net Interest Income | 286 | 340 | 498 | 650 | 763 | 29.8% |
| Other Income (₹ Cr) | 0 | 1 | 1 | 2 | 4 | — |
| Operating Profit (₹ Cr) | 198 | 218 | 273 | 342 | 422 | 22.7% |
| Net Profit (₹ Cr) | 146 | 161 | 206 | 254 | 314 | 23.7% |
| EPS (₹) | 8.80 | 9.71 | 12.39 | 15.31 | 17.11 | — |
| ROE (%) | 13% | 13% | 14% | 15% | 14% | — |
| ROCE (%) | 16% | 17% | 18% | 24% | 20% | — |
| Net Debt/Equity (x) | 3.12 | 3.58 | 4.27 | 4.02 | 3.77 | — |
| CAR (%) | 32.7 | 32.3 | 29.2 | 28.4 | 24.7 | — |
| Gross NPA (%) | 3.5 | 3.8 | 4.1 | 3.9 | 3.7 | — |
| Net NPA (%) | 1.2 | 1.4 | 1.6 | 1.5 | 1.3 | — |
💡 Key Takeaways:
- Consistent 24% Revenue CAGR—driven by AUM growth in MEL & SME.
- PAT CAGR 24%+, but NII growth (30%) indicates margin expansion and scale.
- CAR healthy at 24.7%, above RBI’s 15% minimum, but trending down with AUM surge.
- Asset quality stable: GNPA ~3.7%, NNPA ~1.3%.
🚀 Strategic Highlights & Growth Triggers
- Aggressive AUM Ramp-up
- ₹5,056 Cr (FY21) → ₹10,216 Cr (9MFY24) consolidated; targeting ₹12,000 Cr by FY26.
- Product Diversification
- From 60% MEL to 45% MEL + 36% SME; salaried PL and CV lending added to reduce concentration risk.
- Digital Underwriting Platform
- JV with fintech startups for AI-based credit scoring; reduced approval TAT from 3 days to 4 hours.
- Yield Management
- Maintains 26–27% financing margins on advances, vs. 22% NBFC peers.
- Capital Raise
- ₹175 Cr NCD issue in May 2025 (CARE AA- rating) for liability management.
- Exploring QIP to shore up CAR for continued AUM traction.
⚖️ Fair Value Estimate 🔍
- Assume FY26 PAT growth +15% → ₹361 Cr
- Choose NBFC PE band: 12–15x (given MAS’s mid-tier asset quality and growth)
- → Implied Market Cap: ₹4,332 Cr – ₹5,415 Cr
- Shares Outstanding: ~18.1 Cr (₹5,272 Cr market cap / ₹291 CMP)
- 🧮 Fair Value Range = ₹239 – ₹299 per share
CMP: ₹291 → trades at the top end of fair value, implying FY27+ growth or multiple expansion.
📌 EduInvesting Take
MAS Financial is the small-but-mighty NBFC punching above its weight:
- 🟢 High-Yield Focus: MEL & SME yields ~26% vs. industry ~18%
- 🟢 Rapid Scale: AUM doubled in 3 years with minimal dilution
- 🟢 Stable Asset Quality: GNPA <4%, NNPA ~1.3%
Yet…
- 🔴 Working Capital Strain: NIM squeeze if funding costs rise
- 🔴 CAR Erosion: Needs QIP or equity raise by FY27 to maintain buffer
- 🔴 Valuation Premium: 17x PE vs. 12–15x NBFC peers
- 🔴 Funding Mix: 75% borrowings vs. 25% deposits across peers → interest coverage at risk if RBI hikes
If MAS can sustain 20%+ PAT growth and absorb funding cost hikes, it could re-rate to 15x. Otherwise, ₹240 level may be a safer entry.
🚩 Risks & Red Flags
| 🚩 Factor | Why It Matters |
|---|---|
| Funding Cost Volatility | 75% AUM funded via wholesale borrowings — RBI hikes hit NIM first |
| CAR Decline | Down from 32% to 24.7% → potential equity dilution ahead |
| Concentration Risk | Top 5 districts account for 40% of AUM — regional downturns hurt |
| Regulatory Crackdown | Repo-linked lending caps could reduce yields on MEL products |
| Rural MSME Slowdown | SME & MEL AUM ~80% — agriculture or infra slowdown dampens growth |
🧠 Final Word
MAS Financial Services has earned its stripes as a growth NBFC, doubling AUM and net profit over three years with healthy yields and controlled NPAs.
But at ₹291 (17x FY25 EPS), you’re bidding up growth and margin — the market expects continued 25% EPS CAGR and stable funding costs.
- For risk-takers: A small position makes sense if you believe in MAS’s digital underwriting and SME pivot.
- For cautious investors: Waiting for a ₹240–₹260 range or a CAR boost post-QIP gives a margin of safety.
MAS is the sleeper NBFC that could outsprint larger peers — but only if it navigates funding and capital headwinds without stumble.
✍️ Written by Prashant | 📅 June 17, 2025
Tags: mas financial services, nbfc growth, equipment loans, sme finance, aum doubling, nbfc valuation, asset quality, funding cost risk, eduinvesting recap, digital underwriting
