Buy MAS Financial Services; target of Rs 970: Motilal Oswal

Motilal Oswal's research report on MAS Financial Services

MASFIN’s 3QFY23 PAT rose 28% YoY to INR513m (in line). NII grew 41% YoY to INR1.25b, while Opex at INR421m grew 50% YoY. PPOP rose 36% YoY to INR827m. 9MFY23 PAT grew 27% YoY to INR1.5b (PY: INR1.15b). Credit costs grew 17% QoQ to INR142m (est. INR76m). 3QFY23 disbursements grew 39% YoY but declined 2% QoQ to ~INR22.2b. 9MFY23 disbursements surged 61% YoY to INR66.4b (PY: INR41.2b). Asset quality was stable QoQ, with GS3/NS3 at 2.2%/1.6%. In MSME and SME lending, MASFIN is relatively better than its peers. Capital adequacy and liquidity on the balance sheet remained healthy.

Outlook

Maintain BUY with a TP of INR970 (premised on 3x Sep’24E BV).