MAS Financial Services Limited: Steady Strides Towards a Lakh Crore AUM in Q2 FY26

MAS Financial Services Limited, a prominent non-banking financial company (NBFC) in India, has once again demonstrated its consistent and robust financial performance, marking its 122nd consecutive quarter of strong results. For the second quarter of fiscal year 2026 (Q2 FY26), the company reported a consolidated Asset Under Management (AUM) of INR 13,821 crore, reflecting an impressive 18.5% year-on-year growth. Profit After Tax (PAT) also saw a significant increase, reaching INR 91.43 crore, up 17.79% from the corresponding period last year. These figures underscore MAS Financial's resilient business model and its ability to deliver sustained growth even amidst evolving market dynamics.

The company's strategic focus on serving the underserved credit needs of mid and low-income group segments continues to drive its diversified product portfolio. Micro Enterprise Loans remain the largest segment, with an AUM of INR 5,210 crore, growing 9.78% year-on-year. SME Loans followed with INR 4,633 crore, marking a 16.58% growth. The Two-Wheeler Loans segment experienced a robust 29.83% growth, reaching INR 924 crore, while Commercial Vehicle Loans grew 17.63% to INR 1,059 crore. Notably, Salaried Personal Loans showed exceptional growth of 71%, reaching INR 1,173 crore, indicating strong traction in this newer product segment. The housing finance subsidiary, MAS Rural Housing & Mortgage Finance Limited (MRHMFL), also contributed significantly, with an AUM of INR 821.70 crore, a 23.65% increase year-on-year, and a PAT growth of 25.90% to INR 2.99 crore.

Strategic Vision and Operational Excellence

MAS Financial's management articulated a clear, long-term vision to achieve INR 1 lakh crore in AUM within a decade. This ambitious goal is underpinned by a strategy of consistent and steady growth, which management believes is the fastest way to reach their destination. The company's track record, including a 20% AUM CAGR and 22% PAT CAGR over the last decade (2015-2025), provides a strong foundation for this future growth. Management emphasized that this growth will be predominantly fueled by internal accruals, maintaining a substantial promoter stake and ensuring capital adequacy.

Operational excellence is a cornerstone of MAS Financial's strategy. The company has invested heavily in technology, building a 100-person tech team and an in-house tech stack. This includes integrating over 50 APIs to ensure authentic data sourcing, enabling 100% cashless disbursements and collections, and significantly reducing turnaround times (TAT) for loan processing. This digitalization effort not only enhances efficiency but also improves the quality of credit assessment, which is crucial for maintaining asset quality. The company's customer-centric approach, combined with its robust technology infrastructure, allows it to cater effectively to the evolving needs of its borrowers.

Asset Quality and Liability Management

Despite the challenging macroeconomic environment, MAS Financial has maintained best-in-class asset quality. The net Stage 3 assets stood at 1.69% for the standalone entity and 0.66% for MRHMFL as of September 30, 2025. Management highlighted their active de-risking across geographies, products, and distribution channels. While there has been an increase in Days Past Due (DPD) over the last two years, management attributes this to the current scenario in certain sectors and assures that it remains within control, with improving eligibility ratios for borrowers. The company's capital adequacy ratio remains strong at 24.57%, with Tier-I capital at 22.71%, well above regulatory norms. This strong capitalization, coupled with a diversified resource mix and robust liability management, ensures sufficient liquidity and flexibility for future growth.

Outlook and Future Growth Drivers

MAS Financial is optimistic about the coming quarters, expecting AUM growth to accelerate to 20-25% in the near term. The company aims to maintain its Return on Assets (ROA) between 2.75% and 3.00% and Return on Equity (ROE) between 16% and 18%. Key growth drivers include the housing, SME, and wheels portfolios, with a strategic shift towards more asset-backed lending. The recently approved insurance broking subsidiary, MASFin Insurance Broking, represents a new vertical that will initially focus on captive business, further diversifying the company's offerings. Management's proactive approach to risk management, coupled with its commitment to technological advancement and a strong human capital base, positions MAS Financial for continued sustainable growth and value creation for its stakeholders.

The company's disciplined execution, strategic clarity, and unwavering commitment to its long-term vision of becoming a significant player in India's financial services sector continue to build investor confidence. MAS Financial is not just growing; it is growing with purpose, ensuring progress is driven by sound fundamentals and a deep understanding of the markets it serves.