Bank of Maharashtra — Q1 FY26 earnings call

Call held 15 Jul 2025

Management summary

Bank of Maharashtra reported a consistent Q1 FY26 performance, with strong business growth of 15% YoY to INR 5.46 lakh crore and a healthy NIM of 3.95%. Asset quality remained robust with NNPA at 0.18% and PCR at 98.36%, while the cost-to-income ratio improved to 37.57%. The bank is actively expanding its branch network, revamping digital offerings, and establishing a GIFT IBU, though it noted an increase in slippages and SMA-2, particularly from the agriculture segment, partly due to reclassification.

Highlights

  • Total business grew 15% YoY to INR 5.46 lakh crore, adding INR 70,000 crore, demonstrating consistent performance.

  • NIM stood at 3.95%, supported by a CASA ratio above 50% and strategic management of high-cost bulk deposits, despite repo rate cuts.

  • Asset quality remained robust with NNPA at 0.18% and a high PCR of 98.36%, indicating strong provisioning.

  • Cost-to-income ratio improved to 37.57% from 38% last year, staying below the 40% guidance.

  • Treasury profit significantly increased to INR 625 crore in Q1 FY26 from INR 360 crore in Q1 FY25, with additional contributions from mutual funds and forex.

Concerns

  • Slippages increased to INR 727 crore in Q1 FY26, with 47% (INR 343 crore) originating from the agriculture segment.

  • SMA-2 numbers rose to INR 171 crore in Q1 FY26 from INR 40 crore in the previous quarter.

  • Agri and MSME portfolios saw Q-o-Q declines of 7-8% due to reclassification based on RBI guidelines.

Key financials

3 periods

Headline

  • Total Business
    ₹5.46L Cr
    YoY +15%
  • NIM
    4%
  • NNPA
    0.18%
  • PCR
    98.4%
  • Cost-to-Income Ratio
    37.6%
  • Yield on Advance
    9.3%
  • Slippages
    ₹727 Cr
  • SMA-2
    ₹171 Cr
  • SMA-1
    ₹114 Cr
  • CRAR
    20.5%

Q1 FY25

  • Treasury Profit
    ₹360 Cr

Q1 FY26

  • Treasury Profit
    ₹625 Cr

What they filed

Q1 FY27: revenue up 13.9%, net profit up 34.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue6,017 6,325 6,731 7,054 7,128 +18%7,344 +16%7,755 +15%8,035 +14%
Net profit1,333 1,412 1,502 1,504 1,669 +25%1,799 +27%2,045 +36%2,023 +35%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Agriculture
    ₹343 Cr Slippages (Q1 FY26)-8% Portfolio Growth (QoQ)
  • MSME
    -7% Portfolio Growth (QoQ)
  • Gold Loan
    58% Portfolio Growth (YoY)

Capital allocation

high confidence
  • Liquidity Liquidity disclosed Board approval for raising INR 7,500 crore debt plus equity, to be exercised at an opportune time and mode.
    both domestic and foreign covering all markets, those who are invested with us, but as of today, we have taken Board approval for raising INR7,500 crore debt plus equity but we will look at this option at the opportune time and opportune mode, as well.

Guidance & targets

Profitability

  • NIM Profitability · FY26 · High confidence 3.75%
    my NIM guidance for this year is conservative again at 3.75%.

    — Nidhu Saxena

Deposit Franchise

  • CASA Ratio Deposit Franchise · FY26 · High confidence above 50%
    We are keeping the guidance to maintain CASA ratio above 50%

    — Nidhu Saxena

Growth

  • Total Business Growth Growth · FY26 · High confidence 15%
    growth guidance that we have kept total business to grow at, for this year also is 15%.

    — Nidhu Saxena

  • Advances Growth Growth · FY26 · High confidence 17%
    advances within which will grow at 17%

    — Nidhu Saxena

  • Deposit Growth Growth · FY26 · High confidence 14%
    deposit, we have kept a guidance of 14%.

    — Nidhu Saxena

Efficiency

  • Cost-to-Income Ratio Efficiency · FY26 · High confidence below 40%
    Guidance is to maintain cost to income below 40%.

    — Nidhu Saxena

Capital Adequacy

  • CRAR Capital Adequacy · FY26 · High confidence around 18%
    We have kept the guidance to maintain CRAR at around 18%.

    — Nidhu Saxena

Asset Quality

  • Slippage Ratio Asset Quality · FY26 · High confidence below 1%
    The guidance is to maintain it below 1%

    — Nidhu Saxena

  • Credit Cost Asset Quality · FY26 · High confidence 1%
    and credit cost 1%.

    — Nidhu Saxena

  • NNPA Asset Quality · FY26 · High confidence 0.2% to 0.25%
    the fine NNPA guidance that we are maintaining, is 0.2% to 0.25%

    — Nidhu Saxena

Branch Expansion

  • New Branches Branch Expansion · next 18 months · High confidence 321
    we have broken down this large objective to the next 3 years and have carved out a list of 321 branches. A Project 321 is running in the bank... we have this objective of opening 321 branches in the next 18 months.

    — Nidhu Saxena

Digital Initiatives

  • Mobile Banking Application Revamp Digital Initiatives · 1 month from now · High confidence world-class experience
    probably 1 month from now, we will be revamping our existing mobile banking application and will try to deliver a world-class kind of an experience through the new application that will be available.

    — Nidhu Saxena

Market context

  • GIFT IBU Operations Global Expansion · Q2 FY26 · High confidence start booking business
    in Q2, we will start booking business there.

    — Nidhu Saxena

What to watch in Q2 FY26

Mobile Banking App Revamp Launch

1 month from call date
Current Existing app, revamp expected
Target New world-class mobile banking application launched

Why it matters

Expected to attract new clients and improve core business traction, a key digital initiative for growth.

The mobile banking project has been fast tracked and probably 1 month from now, we will be revamping our existing mobile banking application and will try to deliver a world-class kind of an experience through the new application that will be available.

Risks & concerns

  • Cyclical Agri Slippages

    medium

    Q1 traditionally sees higher slippages in the agriculture segment due to its cyclical nature, contributing 47% of total slippages.

    Management acknowledged

  • Increase in SMA-2 Accounts

    medium

    SMA-2 numbers increased to INR 171 crore from INR 40 crore, though SMA-1 reduced, indicating some shifts between categories.

    Analyst acknowledged

  • Regulatory Reclassification Impact on Segment Growth

    medium

    New RBI guidelines led to reclassification of Gold Loans from Agri to Retail and co-lending MSME portions to non-priority retail, impacting reported segment growth.

    Management acknowledged

  • NIM Contraction from Repo Rate Cuts

    low

    40% of the loan book is linked to repo, leading to an 18-19 bps reduction, but mitigated by deposit strategies and MCLR resets.

    Management acknowledged

Q&A highlights

8 direct
NIM Movement and Yields Direct
My average CASA has seen an improvement of 14 bps, 14% point year-on-year, so straightaway the 18 bps of reduction in repo loans have been offset with the high CASA and a very conscious strategy of not depending on high-cost bulk to fuel my growth.

Clarifies the key drivers (CASA, cost of deposits, MCLR resets) that helped maintain NIM despite repo rate cuts, providing insight into the bank's strategic balance sheet management.

Asked by Rohan Mandora

Investment Book Duration Strategy Direct
We knew that going forward, RBI is further going to do these rate cuts, so we have purchased a longer-term duration security in fact in SDL also in order to maintain yield or to protect our yield.

Explains the bank's proactive treasury strategy to protect yields and benefit from capital appreciation in anticipation of future interest rate cuts.

Asked by Rohan Mandora

Business Growth and FY26 Guidance Direct
This quarter also has seen a year-on-year growth of 15% in total business, which has gone up to INR5.46 lakh crore, and we have added INR70,000 crore... growth guidance that we have kept total business to grow at, for this year also is 15%.

Reaffirms confidence in the full-year growth targets despite Q1 being a lean quarter, providing specific numbers and strategic enablers for achieving them.

Asked by Ashok Ajmera

Increase in Slippages and SMA-2 Direct
INR343 crore, so 47% of that slippage has come from the Agriculture segment... I'm happy to share during these 15 days, we have already upgraded INR240 crore from this fresh slippage.

Provides a detailed breakdown of the increased slippages, attributing a significant portion to the cyclical agriculture segment and highlighting active recovery efforts.

MSME Asset Quality and Underwriting Direct
If you ask me not only in MSME, we have strengthened our underwriting benchmark standards as well... not a single loan under any scheme is permitted for an individual if the credit score is below 681.

Details the bank's stringent underwriting standards and philosophy for MSME lending, emphasizing a focus on prime borrowers to maintain asset quality.

Asked by Akshay Badlani

OPEX Intensity and Employee Recruitment Impact Direct
We have closed this year, even this quarter at 37.57%... incrementally what revenue that they will generate for me will be more than offsetting the cost that we'll be experiencing.

Explains how the bank manages its cost-to-income ratio despite significant employee additions and branch expansion, linking it to revenue generation from new units.

Asked by Akshay Badlani

Capital Raising (QIP) Timeline Direct
Today, my CRAR stands at 20.5%, so, it's a healthy CRAR that I'm maintaining... There is no immediate case for me to go and raise capital, number one.

Clarifies that the bank's strong capital adequacy means there is no immediate need for capital raising, indicating a strategic rather than urgent approach to the Board-approved INR 7,500 crore plan.

Asked by Abhishek Kothari

Agri & MSME Loan Book Decline and Reclassification Direct
Due to this, we have reclassified this agriculture to the Retail Gold Loan, because of which, there has been a decrease of 8%... The CRO is examining these guidelines and the guidance will come from him and the business vertical will take the call, and we will reverse this as entitled by the RBI clarification.

Explains that declines in Agri and MSME portfolios are due to regulatory reclassification rather than underlying business weakness, with potential for future adjustments based on new RBI guidelines.

Asked by Ashlesh Sonje

3 min read 6 chapters

Detailed narrative

Consistent Performance & Growth Drivers

Bank of Maharashtra reported a consistent Q1 FY26 performance, maintaining a trend seen over the last 3-4 years. Total business grew 15% year-on-year to INR 5.46 lakh crore, adding INR 70,000 crore. This growth is supported by strategic branch expansion, with a plan to open 321 branches in the next 18 months, and entry into new geographies. The bank also highlighted its leadership in 18 out of 26 key financial parameters among peers in March 2025.

NIM Resilience & Deposit Strategy

Despite repo rate cuts impacting 40% of its loan book (18-19 bps reduction), the bank maintained a strong NIM of 3.95% in Q1 FY26, down slightly from 4% at FY25 end. This was achieved by a sequential reduction in the cost of deposits and maintaining a CASA ratio above 50% (53% at FY25 end, 14 bps YoY improvement). Strategic avoidance of high-cost bulk deposits and ongoing MCLR resets (35 bps increase over 12 months, with 20-30% still to be repriced) further cushioned NIM contraction.

Asset Quality Management

The bank demonstrated robust asset quality with NNPA at 0.18% and a high Provision Coverage Ratio (PCR) of 98.36%. While slippages increased to INR 727 crore in Q1 FY26, 47% (INR 343 crore) originated from the cyclical agriculture segment, with INR 240 crore already upgraded. SMA-2 numbers rose to INR 171 crore from INR 40 crore, but SMA-1 reduced from INR 214 crore to INR 114 crore, indicating active management and shifts between categories.

Digital Transformation & New Offerings

Bank of Maharashtra is fast-tracking its digital initiatives, with a revamped mobile banking application expected to launch in approximately one month, aiming for a world-class experience. The bank also secured regulatory approval for a GIFT City International Banking Unit (IBU) within five months and plans to commence business there in Q2 FY26. This IBU is expected to open global opportunities, enhance customer stickiness, and drive new business growth.

Cost Efficiency & Capital Adequacy

The bank improved its cost-to-income ratio to 37.57% in Q1 FY26, down from 38% last year, staying well below its guidance of 40%. This efficiency is maintained despite adding around 850 employees, as new branches in growth centers are expected to generate offsetting revenues. The Capital to Risk-weighted Assets Ratio (CRAR) stands strong at 20.5%, well above the guidance of 18%, indicating no immediate need for capital raising, though Board approval for INR 7,500 crore debt plus equity is in place for opportune timing.

Treasury Performance & Segment Reclassification

Treasury operations contributed significantly, with profit increasing to INR 625 crore in Q1 FY26 from INR 360 crore in Q1 FY25. Domestic profit from treasury rose from INR 37 crore to INR 141 crore, and an additional INR 104 crore came from mutual funds, with forex profit adding INR 40 crore. The bank also saw reclassification impacts, with ATL Gold Loans (under INR 2 lakh collateral) moving from Agri to Retail, and some co-lending MSME portions moving to non-priority retail due to regulatory clarity, leading to Q-o-Q declines in these segments.

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