MAS Financial Services Q2 Review — Robust Performance In H1; Momentum To Sustain: Axis Securities

Axis Securities Report

MAS Financial Services Ltd. reported yet another strong quarter. While operational performance was marginally ahead of our expectations (despite higher-than-expected provisions), earnings were broadly in-line with our expectations.

The disbursement growth momentum was sustained with a growth rate of 53/5% YoY/QoQ. Furthermore, the management has stated that the momentum on disbursements has continued going into Q3 FY23.

Robust disbursements translated into a healthy assets under management growth of 30/7% YoY/QoQ, driven by growth in small and medium enterprise loans (up 33% YoY, up 9% QoQ) and growth reviving in the two-wheeler segment (up 30% YoY and up 22% QoQ, albeit on a lower base).

The share of loans sourced from non-banking financial company partners' loans moderated to ~40% from 56/45% YoY/QoQ, which was in line with the management’s focus on ramping up the direct distribution channel.

The scale-up of the direct channel has been progressing well with MAS adding 12 branches and ~400 plus customer centres QoQ.

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