Buy MAS Financial Services; target of Rs 740: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on MAS Financial Services

MAS Financial Services (MASFIN) is an Ahmedabad-headquartered, non-deposit-taking NBFC incorporated in 1995 by first-generation entrepreneurs, Mr. Kamlesh Gandhi and Mr. Mukesh Gandhi. It operates out of six states, of which Gujarat and Maharashtra account for bulk of the AUM. A quintessential NBFC, it targets the middle and low income customer segments.  Over the past five years, MASFIN’s AUM grew at a robust 35% CAGR to reach INR37b in 1HFY18. Growth was driven by their flagship product (MEL loans) and new product such as SME loans. MEL and SME accounts for 83%+ of the total AUM vs 64% in FY13. The company has impeccable track record of 39% PAT CAGR over FY12-17 with consistent ROA (on AUM) of 2%+. Given a favorable backdrop, we expect the company to deliver 25% AUM over FY17-20, resulting in 25% EPS CAGR over the same time period.

Outlook
We initiate coverage with a Buy rating and a target price of INR740 (25x FY20 EPS, Implied 4.3x FY20 BV).
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