MAS Financial AUM growth: 20-25% target in FY26

What the management is guiding for

MAS Financial Services said it is working to return to its targeted 20-25% annual growth in Assets Under Management (AUM) within the next one to two quarters. Chairman and Managing Director Kamlesh Gandhi linked the outlook to signs of improvement in “eligible demand” at the ground level, which the company expects to strengthen over the next two to three quarters. Recent AUM growth of about 18% year-on-year was described as deliberate, with management reiterating that it will not chase growth at the cost of risk outcomes. The company also reiterated a long-term “Vision 2036” target of reaching ₹1 lakh crore in AUM within the next decade.

Why growth slowed and what could change

Management attributed the recent moderation in growth to a cautious stance in a challenging credit environment, particularly for MSME lending. It said credit demand must be assessed as “eligible demand,” and that this metric has started improving. MAS expects a gradual pickup, which could bring it back to the 20-25% growth trajectory. The company also pointed to quarterly momentum, citing an AUM increase of about 6% in Q3 over Q2 and an expectation of 5-7% Q3 growth over Q2.

Capital position and liquidity buffers

MAS said it remains “strongly capitalized,” with capital adequacy cited around 23% and specifically 22.85% in the update, alongside Tier-1 capital around 21.5%. Management said it intends to maintain capital adequacy around 20% going forward. On liquidity, it disclosed it has accessed funding lines of approximately ₹1,550 crore across 14 banks, while maintaining utilisation of around 70-75% and keeping the balance as liquidity. The company also said its liability strategy has secured funding through H1 FY27.

Consolidated AUM and growth drivers

The company reported consolidated AUM around ₹13,821 crore for Q2 FY26, up 18.32% year-on-year. Another disclosed AUM figure was ₹14,641 crore, described as up 18.28% year-on-year, driven by festive demand and recovery in eligible demand. Management linked growth prospects to improving conditions in MSME credit and a steady return of disbursement momentum.

Standalone performance: income and profit trends

On a standalone basis, MAS reported asset growth of about 18% from ₹11,677 crore to ₹13,782 crore. Total income rose about 23% from ₹390 crore to ₹481 crore. Profit before tax increased about 21% from ₹105 crore to ₹127 crore. The company also disclosed net profit of ₹91.43 crore, up 17.79%.

Segment mix: MSME remains the core

MAS reiterated that MSME remains its primary focus, with micro enterprise loans (MEL) and SME as key products. It disclosed that micro enterprise loan AUM rose from ₹4,793 crore to ₹5,737 crore, and SME book grew from ₹4,500 crore to ₹5,213 crore. The company also referenced growth in other products such as two-wheelers and commercial vehicles.

Housing finance subsidiary: growth vs quality trade-off

For the housing finance subsidiary, MAS reported AUM of ₹859 crore, up 23% year-on-year (from ₹701 crore). Management said it would like this business to grow 30-35% given its lower base, and noted it is within “striking distance” of ₹1,000 crore in AUM, although it may take an extra quarter to reach that milestone. It also highlighted profitability and asset quality in housing finance, citing net NPA around 0.67-0.68%.

Asset quality: Stage 3 metrics and target bands

Management said portfolio quality remains stable, highlighting gross Stage 3 assets at 2.5% and net Stage 3 around 1.70% (with another disclosed net Stage 3 figure of 1.69%). It reiterated its intent to keep gross Stage 3 assets within 2.5% to 2.75%. The company framed its growth guidance around prudent underwriting, prioritising risk management and profitability.

Expansion plans and operating priorities

MAS said it is expanding beyond its core Western India base into North India (including Delhi NCR and upcoming Uttar Pradesh) and South India. It stated that the North and South teams have stabilised and should contribute meaningfully to the FY27 20-25% growth target. It also referenced deeper tech integration through BRE/LOS and a push to expand its “Direct Retail” footprint in North and South.

Co-lending and direct assignment strategy

The company reiterated a strategic goal to maintain 20-25% of AUM as “out book” through direct assignment and co-lending. This approach was positioned as part of its balance sheet and risk strategy while pursuing growth in core lending segments.

Analyst commentary and external cues

The update referenced an Axis Securities “Buy” view that saw up to 25% upside. It also mentioned that analysts have cited a “buy rating” with 33% upside in another context. Separately, Motilal Oswal Financial Services was cited as expecting AUM and net profit to grow by 21% and 24%, respectively, between FY25 and FY27.

Key numbers at a glance

Why this matters for investors

The data points underline MAS’s attempt to balance growth and underwriting discipline during an MSME credit cycle that management describes as stabilising. If eligible demand improves as indicated, MAS expects to move back towards its 20-25% AUM growth trajectory without loosening asset-quality thresholds. Capital adequacy above 22% and a stated intent to hold around 20% going forward provide a buffer for growth, while the co-lending and direct assignment approach is positioned as a structural lever to manage balance sheet intensity. The long-term AUM ambition of ₹1 lakh crore is a key strategic marker, but near-term execution will likely be judged on how quickly growth re-accelerates while holding Stage 3 and net NPA metrics in the disclosed bands.

Conclusion

MAS Financial reiterated that it expects to return to 20-25% AUM growth within the next one to two quarters, supported by improving eligible demand and continued focus on MSME lending. The company is pairing this with stable asset-quality targets, strong capital ratios, and regional expansion into North and South India. Management said it will continue to prioritise profitability and asset quality, while working towards near-term scale milestones such as the housing finance subsidiary approaching ₹1,000 crore AUM.