MAS Financial Services Limited Q1 FY27 Earnings Conference Call

Trading Symbol: MASFIN

Financial Performance Highlights

Consolidated Results:

  • AUM grew 21% YoY from ₹13,300 crore to ₹16,100 crore
  • PAT increased 27% YoY from ₹86 crore to ₹110 crore
  • Crossed milestone of ₹16,000 crore consolidated AUM

Standalone Results:

  • AUM grew 21% YoY from ₹12,505 crore to ₹15,147 crore
  • Total income increased 20% YoY from ₹443 crore to ₹530 crore
  • PBT grew 25% YoY from ₹112 crore to ₹140 crore
  • PAT grew 25% YoY from ₹84 crore to ₹105 crore

Portfolio Configuration (Standalone):

  • MSME loans: 77% of book (₹11,638 crore)
  • Wheels segment: 14% of book (₹2,135 crore)
  • Salaried personal loans: 9% of book (₹1,374 crore)

Segment-wise Growth (YoY):

  • MEL book: 23% growth from ₹5,009 crore to ₹6,153 crore
  • SME loan: 21% growth from ₹4,526 crore to ₹5,485 crore
  • Two-wheeler loan: 19% growth from ₹872 crore to ₹1,039 crore
  • CV loan: 13% growth from ₹967 crore to ₹1,096 crore
  • Salaried personal loans: 21% growth from ₹1,131 crore to ₹1,374 crore

Asset Quality

Standalone Portfolio:

  • Gross Stage 3 assets: 2.58% (2.57% in March 2026)
  • Net Stage 3 assets: 1.70% (1.70% in March 2026)
  • Management overlay of ₹17.60 crore maintained as of June 2026

Housing Finance Subsidiary Performance

MAS Rural Housing and Mortgage Finance Limited:

  • AUM grew 23% YoY from ₹794 crore to ₹976 crore
  • Total income grew 30% YoY from ₹23 crore to ₹30 crore
  • PBT grew 62% YoY from ₹3.53 crore to ₹5.70 crore
  • PAT grew 55% YoY from ₹2.76 crore to ₹4.27 crore
  • Gross Stage 3 assets: 0.98% (same as March 2026)
  • Net Stage 3 assets: 0.68% (same as March 2026)
  • Capital adequacy: 35%

Liability Management

Borrowing Costs:

  • Average cost of borrowing: 9.25% for the quarter
  • Reduced by 55 basis points YoY and 15 basis points QoQ
  • Incremental borrowing cost: 9.2% to 9.25%
  • Target to reduce toward sub-9% levels (pre-COVID rates)

Liquidity Position:

  • Average liquidity balance: ₹1,000 crore during the quarter
  • Sanctioned borrowing lines: ₹1,900+ crore across term loans, NCDs, and direct assignment
  • Cash credit facility: ₹1,400 crore across 12 banks with 70-75% utilization
  • Unutilized portion maintained as liquidity buffer

Fund Raising Activities (Q1 FY27):

  • Direct assignment: ₹700 crore executed
  • Sanctioned direct assignment lines: ₹700+ crore (expected utilization in current quarter)
  • Term loans: ₹400 crore raised with 3-5 year average maturity
  • NCDs: ₹650 crore raised (₹360 crore from FMO Dutch Development Bank, remainder from retail and banks)
  • Sanctioned borrowing lines: ₹250+ crore available for future drawdown

Capital Structure:

  • Capital adequacy ratio: 23.25%
  • Tier 1 capital: 21.94%
  • Debt equity ratio: 3.35x
  • Off-book target: 20-25% of AUM through direct assignment

Operational Updates

Distribution Network:

  • 16,500 centers through 209 branches
  • Partnership with 200+ NBFCs (15-year old model)
  • Current mix: 33% partnership model, 67% direct distribution
  • Target: 70%+ direct distribution within 8-12 quarters

Technology Initiatives:

  • In-house tech team: 100 people (business analysts and software engineers)
  • Complete LOS for all products, LMS implementation
  • Adoption of AI and straight-through processing
  • Employee reduction: 380 positions eliminated due to tech adoption
  • Tech automation impacting origination, underwriting, and collections

Management Changes

Effective September 1, 2026:

  • Nishant Jain (CRO for 7-8 years) promoted to Director-Operations (will report to CEO)
  • Darshil Thakkar (with company 10+ years, Head Credit SME/RAC) appointed as new CRO
  • Both are qualified chartered accountants

Business Outlook and Guidance

Growth Guidance:

  • AUM growth: 20-25% YoY (currently at 21%)
  • Targeting higher end of guidance range for full year
  • ROA target range: 2.75% to 3.25%
  • Credit cost range: 1.25% to 1.75% of AUM

Housing Finance Expansion:

  • Targeting 35% growth internally
  • Planning expansion into Southern markets (Tamil Nadu, Karnataka)
  • Recruitment underway, results expected in Q3/Q4 FY27

Q&A Highlights

Asset Quality: Collection efficiencies in CV segment showing normal fluctuations, no undue risk perceived. Monitoring flood impact in Gujarat regions but expect temporary operational disruption only.

Credit Costs: Q1 credit cost of 1.6% includes additional ₹6-7 crore provisioning due to higher on-book assets (8.25% growth vs 5.5% AUM growth). Standard asset provisioning increased from 0.65% to 0.70%.

Write-offs: June quarter write-offs at ₹19 crore vs ₹29 crore in March quarter, offset by higher ECL provisioning.

Branch Expansion: New branches opened post-March 2024 expected to contribute to efficiency improvements and potentially lower cost-to-income ratio.

Subsidy Transaction: Parent company redeemed ₹10 crore optionally convertible preference shares from housing subsidiary due to subsidiary's strong capital adequacy of 37%.