Revenue
Margin
Demand
Guidance
Tone
Event Participants
Executives
4 Nidhu Saxena (MD & CEO), Prabhat Kiran (Executive Director), Sushanta Kumar Mohanty (Executive Director), Unnamed CFO (Management)
Analysts
7 Abhishek Murarka (HSBC), Akshay Badlani (Motilal Oswal), Ashlesh Sonje (Kotak Securities), Ashok Ajmera (Ajcon Global), Jay Mundra (ICICI Securities), Parth Gutka (360 One Capital), Priyank Chheda (Vallum Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Deposits | YoY +13% | Slightly below 14% guidance; no fresh CDs issued in Q1 vs PSB ex-CD growth of ~10% |
| CASA Deposits | YoY +9% | ₹14,000 crores added; SB book at ₹1.28 lakh crores; current account saw seasonal QoQ dip of ~₹2,500-3,000 crores |
| Total Advances | YoY +27% | ₹65,000 crores added vs 18% guidance; IBU contributed ~3% of growth; Retail +25%, Agri +30%, MSME +23%, Corporate +30% |
| Total Business | YoY +19% | ₹1,04,000 crores added in past year; above 16-17% guidance |
| RAM : Corporate Mix | 63:37 | Maintained |
| Gross NPA | 1.45% | Held at March 2026 level; below <2% guidance |
| Net NPA | 0.13% | Below <0.25% guidance |
| PCR | 98.55% | Strong coverage maintained |
| Recoveries | ₹709 crores in Q1 | Cash recovery ₹490 crores, upgrades ₹208 crores; write-off book recovery ₹305 crores |
| Stress Book (NPA + SMA) | 3.18% | 140 bps YoY improvement; down ₹1,300 crores in absolute terms |
| SMA 0+1+2 | 1.34% | 5 bps YoY improvement |
| Net Profit | ₹2,020 crores | YoY +27% |
| Operating Profit | ₹3,117 crores | YoY +21% (₹547 crores added) |
| NIM | 3.85% | Down 10 bps; 10 bps above 3.75% guidance |
| Yield on Advances | 8.57% global / 8.66% domestic | Global yield down 71 bps partly on IBU mix; domestic down only ~13 bps |
| ROA | 1.9% | +10 bps YoY |
| ROE | 24.65% | +165 bps YoY |
| Credit Cost | 0.99% | 20 bps YoY improvement; within <1% guidance |
| Cost of Deposits | 4.38% | Down 22 bps YoY; up 5 bps QoQ on retail TD competition |
| Cost of Funds | — | Down 25 bps YoY |
| CD Ratio | 86% domestic; 81.99% incl. refinance | Global ~87-88%; growth fully deposit-funded; refinance ~₹19,000 crores at 6-6.5% blended cost |
| LCR | 118% average | Within 115-120% band; terminal LCR 114% |
| CET1 / CRAR | 15.56% / 18.64% | Well-capitalized; ₹5,000 crores equity raise approved, awaiting government nod |
Geographic & Segment Commentary
- Retail: Grew 25% YoY; NPA at 0.34%; home loans ~50% of retail book with 80% of new sanctions in prime/super-prime CIBIL buckets (750+); retail NPA in amount terms rose ₹73 crores to ₹150 crores, which management termed non-material.
- Agri: Grew 30% YoY; NPA at 7.58%, down from ~9% two quarters back; eligible Maharashtra debt waiver book of ₹3,500 crores with a max haircut of ₹450-500 crores, fully covered by existing provisions.
- MSME: Grew 23% YoY; NPA at 1.60%; ECLGS disbursements of ₹2,700 crores; vehicle/gold loan cross-sell is a stated focus area.
- Corporate: Grew 30% YoY, sustaining high double-digit growth for four consecutive quarters; RAM:Corporate mix maintained at 63:37.
- GIFT City IBU: Book of ₹8,200 crores built in 8-9 months with $965 million sanctions; contributes ~3% of total advances growth and enhances corporate client stickiness on ECB raising.
- Geography: Outside Maharashtra contributed ₹21,000 crores of the ₹43,000 crores deposit growth; 200 new branches being opened annually, selected via pin-code-level analytics.
Company-Specific & Strategic Commentary
- Profitability-Linked Growth Discipline: A new profitability dashboard tracks whether incremental business profitability matches top-line growth down to branch/zonal level; all credit sanctions in the last 15 months benchmarked at minimum CIBIL 681 (prime), with 80% of home loan sanctions in prime/super-prime categories.
- Branch Expansion: ~200 branches per year under a 5-year plan; branches open for 3+ years are all profitable; new branches carry a zero base, structurally supporting above-industry growth.
- Digital & Product Innovation: Revamped mobile banking app scaled active registered users from 2.75 lakhs to 14 lakhs in 9 months; "global savings" product and FCNR deposits at 6.60% (5-year) support CASA and dollar mobilization.
- Capital Management: ₹5,000 crores equity raise plan - Board, shareholder and RBI approvals secured; awaiting government approval; no urgent capital need given CRAR of 18.64%.
- Resource Diversification: ~₹19,000 crores refinance at 6-6.5% blended cost (no CRR/SLR loading) preferred over high-cost bulk deposits; no CDs raised in Q1.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Business Growth | 16-17% for FY27 (reaffirmed) | Q1 delivered 19%; management sticks to committed guidance |
| Advances Growth | 18% for FY27 (reaffirmed) | Q1 delivered 27% (24% ex-IBU); management declined to revise upward |
| Deposits Growth | ~14% for FY27 | Q1 at 13%; core deposit focus with no CDs |
| NIM | 3.75% for FY27 (maintained) | Q1 at 3.85%; MCLR hikes in last two ALCOs and 53% repo-linked book provide support |
| GNPA | <2% for FY27 | Q1 at 1.45% |
| NNPA | <0.25% for FY27 | Q1 at 0.13% |
| Credit Cost | <1% for FY27 | Q1 at 0.99% |
| Cost-to-Income | <40% | Maintained despite branch expansion and hiring |
| ECL Provisioning | ~₹125 crores per quarter to FY31 | Total ₹2,500 crores over 4 years; final RBI guidelines make it a net-worth item, not P&L |
| Debt Waiver | Implementation expected within FY27 | Government receivable ₹2,750 crores; haircut ₹450-500 crores fully provided; ₹1,100 crores TWO upside |
| Equity Raise | ₹5,000 crores during FY27 | Awaiting government approval; opportune timing |
Risks & Constraints
| Risk | Context |
|---|---|
| Deposit Disintermediation | Management called the shift of household savings to SIPs/mutual funds/Demat accounts "irreversible," pressuring core deposit growth; mitigants include 200 new branches annually, retail TD schemes, refinance and CDs |
| Cost of Deposits Pressure | Cost of deposits rose 5 bps QoQ to 4.38% as retail TD growth (16%) outstripped total deposit growth (13%); management keeps retail rates competitive while avoiding institutional bulk deposits |
| Agri Stress / Debt Waiver Execution | Debt waiver eligible book of ₹3,500 crores; max haircut of ₹450-500 crores is fully provided (₹1,700 crores held), and a ₹1,100 crores TWO book offers recovery upside, but timing depends on scheme finalization |
| Interest Rate Uncertainty | West Asia crisis has stalled expectations of further rate cuts; a potential rate hike would lift earnings through the 53% repo-linked book, but near-term MCLR resets continue to pressure yields |
| Elevated CD Ratio | Global CD ratio ~87-88%, domestic 86% (81.99% including refinance); management comfortable as growth is deposit-funded but committed to monitoring the metric |
Q&A Highlights
NII Growth vs Advances Growth
- Question: NII growth (~14.5%) lags advances growth (27%) despite strong PPOP; should investors focus on operating profit? Any one-offs? (Priyank Chheda, Vallum Capital)
- Answer: Management is committed to the 15% NII and 3.75% NIM guidance. A risk-management profitability dashboard now tracks incremental business profitability at branch/zonal level, embedding pricing discipline in every credit decision; growth is deliberate and profitable with no asset quality compromise. (Nidhu Saxena)
Loan Growth Guidance & Current Account Decline
- Question: Will the 18% advances guidance be revised upward given system acceleration? Why did current account balances fall sharply QoQ? (Priyank Chheda)
- Answer: 27% growth includes ~3% from IBU (₹8,200 crores in 8-9 months); domestic growth is ~24%. Guidance is maintained at 18% - management treats shared guidance as sacrosanct and prefers over-delivering. The current account decline of ~₹2,500-3,000 crores is seasonal and not a concern; CASA grew 9% YoY (₹14,000 crores) with support from 200 new branches annually, a "global savings" product, and mobile banking users up from 2.75 lakhs to 14 lakhs. (Nidhu Saxena)
Debt Waiver Scheme & Tax Rate
- Question: What are the P&L/balance sheet implications of the Maharashtra debt waiver, and what tax rate should be assumed for FY27? (Priyank Chheda)
- Answer: Eligible book is ₹3,500 crores; government receivable ₹2,750 crores plus ₹260 crores from farmers. Max haircut of ₹450-500 crores is fully covered by ₹1,700 crores of existing provisions; the ₹1,100 crores TWO book offers incremental upside. Farmers will receive ₹50,000 per account incentives into SB accounts, aiding CASA. Tax rate: 12-13% on OP basis and 16-17% on PBT basis, supported by ~40% rural branches, bad debt write-off benefits, and DTA. (Nidhu Saxena; CFO)
CD Ratio & Deposit Strategy
- Question: CD ratio is ~87-88% - how comfortable is the bank, and what progress on deposits outside Maharashtra? (Akshay Badlani, Motilal Oswal)
- Answer: Domestic CD ratio is 86%, or 81.99% including refinance. Q1 deposits grew 13% with zero CDs vs PSB ex-CD growth of ~10%. Refinance of ~₹19,000 crores at a blended 6-6.5% (no CRR/SLR loading) is preferred over high-cost bulk deposits. ₹21,000 crores of the ₹43,000 crores deposit growth came from outside Maharashtra. A ₹5,000 crores equity raise is Board-, shareholder- and RBI-approved, awaiting government approval. (Nidhu Saxena)
Opex & Operating Leverage
- Question: Opex grew only 8-9% vs balance sheet growth of 20%+ - one-off or structural? (Akshay Badlani)
- Answer: Opex will keep rising with 200 new branches/year and staffing (staff count up from 13,000 to 17,500 in two years) to manage operational risk. Cost-to-income guidance remains below 40%; branches open for 3+ years are all profitable, and incremental revenue more than offsets expansion costs. (Nidhu Saxena)
Margin Trajectory: Yield on Advances & Cost of Deposits
- Question: Why did yield on advances decline sharply QoQ, and has cost of deposits bottomed out? (Parth Gutka, 360 One Capital; Ashlesh Sonje, Kotak Securities)
- Answer: Global yield is 8.57% (down 71 bps) including IBU; domestic yield is 8.66%, down only ~13 bps, reflecting MCLR resets from past rate cuts. MCLR has been hiked in the last two ALCO meetings and 53% of the book is now repo-linked, positioning the bank for any future rate hike. Cost of deposits is down 22 bps YoY to 4.38%; the 5 bps QoQ increase reflects 16% retail TD growth (vs 13% total deposits) as the bank keeps retail rates competitive while avoiding institutional bulk deposits. (Nidhu Saxena)
COVID Provisions & ECL Framework
- Question: How is the bank thinking about the ~₹1,200 crores COVID provision buffer, and is it correct that no ECL provisions are held? (Parth Gutka)
- Answer: COVID provisions of
₹1,050 crores roughly equal the ~₹1,000 crores restructured book - an extra buffer that can be written back gradually. ₹255 crores has already been set aside for ECL; total ECL requirement is ~₹2,500 crores over four years to March 2031 (₹125 crores/quarter). Final RBI guidelines make ECL a net-worth item, not P&L, and quarterly profit now counts in CRAR, so ECL is no longer a concern. (Nidhu Saxena; CFO)
Segment NPAs & LCR
- Question: GNPA rose QoQ in retail and MSME segments - any stress? What was LCR? (Parth Gutka)
- Answer: Retail NPA is 0.34%, Agri 7.58% (down from ~9%), MSME 1.60%, RAM total 1.23%; the retail NPA increase of ₹73 crores to ₹150 crores is not material. All underwriting in the last 15 months is benchmarked at CIBIL ≥681, and 80% of home loan sanctions are prime/super-prime (23% at 800+, 57% at 750-800). Average LCR was 118% within the 115-120% band; terminal LCR was 114%. (Nidhu Saxena)
ECLGS & FCNR Deposits
- Question: What is ECLGS progress, and how is FCNR mobilization tracking? (Ashlesh Sonje)
- Answer: ECLGS eligible portfolio is ₹6,700 crores; sanctions ₹4,500 crores (65%) and disbursements ₹3,560 crores (82% of sanctions, 53% of eligible), with MSMEs more willing than corporates (₹2,700 crores vs ₹400 crores). FCNR: the bank is offering 6.60% on 5-year deposits, among the best in the PSB space, with major traction expected in August-September. (Nidhu Saxena)
Treasury Income, SMA 2 Spike & Credit Guidance
- Question: Treasury income jumped to ₹266 crores from ₹33 crores in Q4 - sustainable? SMA 2 rose from ₹56 crores to ₹208 crores - is stress building in smaller accounts? (Ashok Ajmera, Ajcon Global)
- Answer: Treasury income includes a one-time SR of ₹104 crores; more SR payments may follow, but no profit target is set for treasury. The SMA 2 spike is one government entity account of ₹87 crores that will regularize; overall stress is down 140 bps YoY to 3.18% and SMA 1+2 improved 5 bps to 1.34%. Credit growth guidance stays at 18% despite 27% Q1 growth, supported by new branches, gold loans (₹13,000 crores, up 75% YoY), and focus sectors like renewables and data centers. (Nidhu Saxena)
Key Takeaway
Bank of Maharashtra delivered a strong Q1 FY27, with total business up 19% YoY (₹1,04,000 crores added), advances up 27% (₹65,000 crores added), and net profit of ₹2,020 crores, up 27% YoY. Asset quality remained robust - GNPA at 1.45%, NNPA at 0.13%, PCR at 98.55% - while NIM held at 3.85%, 10 bps above guidance, and ROE improved 165 bps to 24.65%. Management is executing a 5-year, 200-branch-per-year expansion, scaling the GIFT City IBU to ₹8,200 crores, and growing gold loans 75% YoY, all under a minimum CIBIL 681 underwriting benchmark. FY27 guidance is reaffirmed at 18% advances growth, <1% credit cost, and <40% cost-to-income. Watch points include rising retail deposit competition (cost of deposits up 5 bps QoQ), the Maharashtra debt waiver (₹450-500 crores haircut, fully provided), and deposit disintermediation to capital markets, partly offset by ~₹19,000 crores refinance and a planned ₹5,000 crores equity raise.