Bank of Maharashtra Q3 FY26 Results: PAT up 27%, FY26 Guidance on Track
Solid execution in 9M FY26 with ROA and NIM above guidance. Strong execution against FY26 guidance. Valuations leaves room for re-rating.
1. Public Sector Bank
bankofmaharashtra.in | NSE: MAHABANK
Products & Services
2. FY21-25: PAT CAGR of 96% & Net Interest Income CAGR of 24%
3. FY25: PAT up 36% & Net Interest Income up 19% YoY
4. Q3-27: PAT up 27% & Net Interest Income up 16% YoY
PAT up 9% & Net Interest Income up 5% QoQ
5. 9M-26: PAT up 24% & Net Interest Income up 17% YoY
6. Business metrics: Strong Return ratios
ROE consistently above 20% — rare for PSU banks
7. Outlook: Mid-teen growth
7.1 Management Guidance
We are again going to keep a conservative guidance for NIM for the next year at 3.75%
For advances, we are keeping a guidance at around 17%. For deposits, we are keeping around 14%.
CASA will be maintained above 50%.
My guidance for ROA is 1.75%, which we would like to maintain for the next year.
GNPA has again seen a reduction, and has come down to 1.74%, but guidance is to maintain it below 2% and the credit cost to maintain below 1%.
The guidance, again for cost to income is to maintain it below 40%.
We have kept the guidance to maintain CRAR at around 18%.There is no immediate case for me to go and raise capital, number one
Overall share of RAM is 62:38 and our guidance has been to maintain it at 60:40 plus/minus 2%.
7.2 9M FY26 Performance vs FY26 Guidance
Maintaining guidance quarter-on-quarter
I am satisfied as a bank, as a management that whatever guidance at the beginning of the year for the last 12 to 15 months we have been talking about, we are maintaining and beating our own guidance quarter-on-quarter.
NIM — Outperformed — 3.88% vs 3.75 guidance
ROA — Outperformed — 1.83% vs 1.75 guidance
Advances Growth — Outperformed — 19.62% vs 17 guidance
Deposit Growth — Outperformed — 15% vs 14 guidance
Cost-to-Income — On-track — 37.29 vs below 40 guidance
Credit Cost — On-track — 0.97 vs below 1 guidance
GNPA — On-track — 1.6% vs below 2 guidance
CASA — Marginally behind — 49.54 vs above 50 guidance
CRAR — Below — 17.06 vs about 18 guidance
8. Valuation Analysis
8.1 Valuation Snapshot — Bank of Maharashtra
Current Market Price — ₹65.6
Market cap — ₹50,046.9 Cr
PAT growth of 24% in FY26 sustaining the growth of 9M-26
FY26E Net Worth = 9M-26 Net Worth + Q4 FY26E PAT
FY26E = 7.1× P/E & 1.6× P/B
Earnings Yield (1/PE) = ~14% — significantly above cost of equity, indicating undervaluation.
If FY26 guidance is delivered, there is scope for multiple re-rating based on FY26E numbers:
P/B of 1.75-2× (if the business of performance of FY26 continues into FY27)
This would imply valuation upside without requiring redefinition of fundamentals.
8.2 Opportunity at Current Valuation
NIM’s guidance is conservative — Profitability could surprise
Profitability could surprise on the upside as 3.75% NIM guidance is conservative and it has delivered NIM of 3.88 for 9M-26.
we are keeping a conservative number of 3.75% in terms of the NIM guidance.
Optionality from Re-rating
If current metrics hold, P/B could re-rate to ~1.75-2×.
Re-rating does not require exceptional performance —- continuity of 9M FY26 into FY27
Optionality from Sectoral Re-rating
PSU banks as a basket trade at a discount to intrinsic profitability.
Limited Downside
Valuations are undemanding — provide protection against a weak quarter
8.3 Risk at Current Valuation
Execution Dependence in H2
Loan & Advance growth slightly below run-rate in H1.
FY26 PAT assumption of ₹6,790 Cr requires no slippage on NIM or operating cost — though trajectory so far is solid.
Rate Cycle & Margin Sensitivity
NIM has held at 3.9%+ so far, but rate cuts and deposit repricing could reduce margins.
MAHABANK is confident of delivering on its 3.75% NIM guidance
This quarter also, we have, despite the rate cut impact coming in completeness in this quarter, we have been able to maintain our NIM above the guidance that we had shared in the beginning. And the Q3 and Q4, we have seen that with most of our deposit maturity profile, seeing the deposits getting repriced, we should see that further NIM contraction should not be.
PSU Discount May Persist
Despite strong metrics, PSU label may cap valuation multiples.
Previous coverage of MAHABANK
Don’t like what you are reading? Will do better. Let us know at hi@moneymuscle.in
Don’t miss reading our Disclaimer