Buy MAS Financial Services; target of Rs 1160: Motilal Oswal

Motilal Oswal's research report on MAS Financial Services

MAS Financial Services (MASF)’s 3QFY24 PAT grew 24% YoY to INR624m (in line). PPOP rose ~35% YoY to INR1.1b (in line). Operating expenses rose ~23% YoY to INR518m, with both the C/I ratio and Opex-to-AUM stable at 32% and 2.2%, respectively. Credit costs were at INR257m, translating into annualized credit costs of 1.1% (PQ: 1.1%). MASF recently took an enabling Board resolution to raise up to ~INR7b in one or more tranches through QIP or any other permissible mode. Despite capital adequacy of ~24.5% (Tier 1 of ~21%), this equity raise will be done at an opportune time for the next phase of growth. MASF has also declared the Bonus issue of shares in the ratio of 2:1. The record date has been fixed as 22nd Feb’24.

Outlook

Reiterate BUY with a revised TP of INR1,160 (based on 2.7x FY26E BV).

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