Target: ₹360
CMP: ₹289.75
Strengthening direct distribution reach beyond core markets: Given the scope to grow faster, MAS Financial Services has been consistently eyeing to improve the share of direct distribution in the overall sourcing. The management has reiterated its guidance of increasing the share of direct distribution to 70-75 per cent on a steady state basis vs about 66 per cent currently.
The scale-up of the direct distribution channel also allows the company to foray into newer geographies beyond its core markets of Gujarat and Maharashtra. MAS is currently looking to venture into the North and South India markets with a focus on Tamil Nadu, Andhra Pradesh, Telangana and Karnataka.
The company will look to cement its position in these states to drive its next leg of growth.
The management’s confidence in doubling the book over the medium term and its readiness in terms of operational capabilities and infrastructure is encouraging. MAS remains well-positioned to deliver strong AUM growth driven by a strong distribution network, and adequate capitalisation. However, with the company strengthening its distribution network alongside entering newer geographies is likely to keep Opex elevated. We trim our FY25E earnings estimates by about 4 per cent to reflect the investments, while we broadly maintain our FY26 estimates.