July 30: MAS Financial Services Ltd. reported a healthy performance for the first quarter of FY27, with total income growing 29.6 percentage year-on-year and 4.5percentage quarter-on-quarter to Rs 3.1 billion, ahead of the estimated Rs 2.9 billion by 4.4percentage.
Net interest income grew 43.9percentage YoY and 15.6 percentage QoQ to Rs 2.3 billion, surpassing the estimated Rs 2.1 billion by 13.9percentage. Other income declined 1.4percentage YoY and 19.7percentage QoQ to Rs 740.3 million, compared with the estimated Rs 897.1 million.
Pre-provision operating profit increased 29.6percentage YoY and 5.3percentage QoQ to Rs 2 billion, exceeding the estimated Rs 1.9 billion by 6.2percentage. Operating expenses grew 29.5% YoY and 3.1% QoQ to Rs 1,071.3 million, broadly in line with estimates. The cost-to-income ratio improved to 34.8% compared with 35.3% in 4QFY26 and 34.8percentage in 1QFY26.
Provisions for the quarter stood at Rs 604.9 million, while credit cost was at 1.64% compared with 1.63% in 4QFY26. The higher credit cost was attributed to a management overlay created for ongoing macroeconomic conditions, with no impact on collections reported on account of the same.
Profit after tax stood at Rs 1,046 million, registering growth of 24.7% YoY and 4.9% QoQ, and was 2.4% above the estimated Rs 1,021.8 million. The company reported healthy PAT growth, while profit before tax increased 24.7% YoY and 5.3% QoQ to Rs 1,403 million.
Disbursements grew 42.5% YoY and 7.3% QoQ to Rs 44.6 billion. Assets under management increased 21.1% YoY and 5.5% QoQ to Rs 151.5 billion, in line with estimates.
On asset quality, gross NPA and net NPA remained stable QoQ at 2.58% and 1.70%, respectively, in 1QFY27, compared with 2.57% and 1.70% in 4QFY26. Gross NPA stood at Rs 3,213 million, while net NPA was Rs 1,884 million.
Business Performance
Net interest margin , calculated on average AUM, expanded by 59 basis points QoQ to 6.3%. Yields and cost of funds stood at 16.9% and 8.9%, respectively, in 1QFY27, compared with 16.7% and 9.2% in 4QFY26.
Yields expanded on the back of a tweak in pricing and processing fee strategy in the Retail Asset channel. Further, the rising share of direct retail distribution also benefited yields.
Micro Enterprise grew 22.8% YoY and 7.2% QoQ, accounting for 40.6% of AUM in the quarter, compared with 39.9% and 40.1% in 4QFY26 and 1QFY26, respectively.
SME grew 21.2% YoY and 5.2% QoQ, forming 36.2% of AUM, compared with 36.3% and 36.2% in 4QFY26 and 1QFY26, respectively.
The two-wheeler segment grew 19.2% YoY but declined 2.3% QoQ, accounting for 6.9% of AUM, compared with 7.4% and 7% in 4QFY26 and 1QFY26.
The commercial vehicle segment grew 13.3% YoY and 0.9% QoQ, forming 7.2% of AUM, compared with 7.6% and 7.7% in 4QFY26 and 1QFY26.
The SPL segment grew 21.5% YoY and 8.7% QoQ, accounting for 9.1% of AUM, compared with 8.8% and 9% in 4QFY26 and 1QFY26.
As of 1QFY27, CRAR and Tier-1 stood at 23.3% and 21.9%, respectively, compared with 22.8% and 21.5% in 4QFY26. RoA and RoE for 1QFY27 stood at 3.11% and 15.10%, respectively, compared with 3.08% and 14.88% in 4QFY26.
The company had a total standalone branch network of 209 branches as of June 2026. MAS Rural Housing AUM grew 23.1% YoY and 3.8% QoQ to Rs 9.8 billion.
Valuation and Outlook
At a CMP of Rs 325, the stock trades at 1.8x and 1.6x FY27E and FY28E ABV of Rs 174 and Rs 200, respectively.
The current relative rating of the stock is Overweight , while the absolute rating is LONG . The last target price stood at Rs 450 for March 2027 and is currently under review.
The company’s FY27E estimates include NII of Rs 8,566 million, PPoP of Rs 7,661 million, PAT of Rs 4,218 million and ABV of Rs 174. For FY28E, NII is estimated at Rs 10,411 million, PPoP at Rs 9,277 million, PAT at Rs 5,399 million and ABV at Rs 200.
Earnings estimates and the recommendation will be revised following the investor conference call scheduled for July 30, 2026, at 3:30 PM.