MAHABANK - Bank of Maha

📊 NSE: MAHABANK 🏢 Banks - Public Sector 📅 Last Updated: 12/13/2025 19:02

💰 Financial Performance

Revenue Growth by Segment

Total Interest Income grew 18% YoY to INR 7,128 Cr in Q2 FY26. Interest on Advances increased 16.37% YoY to INR 5,451 Cr, while Interest on Investments grew 24.45% YoY to INR 1,634 Cr. Non-Interest Income saw a 7% YoY increase to INR 845 Cr.

Geographic Revenue Split

The bank is primarily domestic-focused with Domestic Advances at INR 2,53,230 Cr (99.65% of total) as of Sept '25. Overseas Advances were recently initiated, standing at INR 888 Cr (0.35% of total).

Profitability Margins

Net Profit Margin improved as Net Profit grew 23.09% YoY to INR 1,633 Cr in Q2 FY26. Return on Assets (RoA) increased to 1.82% from 1.74% YoY. Return on Equity (RoE) remained strong at 22.58% despite a slight dip from 23.00% YoY due to a larger capital base.

EBITDA Margin

Operating Profit (equivalent to EBITDA for banks) grew 16.91% YoY to INR 2,574 Cr in Q2 FY26. The Operating Profit margin is supported by a declining Cost-to-Income ratio, which improved from 38.81% to 37.10% YoY.

Capital Expenditure

Not disclosed in available documents as a traditional CapEx figure; however, the bank utilized funds raised in FY 2024-25 to improve capital adequacy, resulting in a CRAR of 18.13% as of Sept '25.

Credit Rating & Borrowing

The bank holds an AA+ (Stable) rating for Tier II Bonds from ICRA/CARE and an A1+ rating from CRISIL for short-term instruments. S&P assigned an international rating of BBB- (Stable). Cost of Funds stood at 4.32% in Sept '25, up from 4.20% YoY.

⚙️ Operational Drivers

Raw Materials

CASA Deposits (Savings and Current accounts) represent 48.13% of total deposits; Term Deposits represent 51.87%; Borrowings represent INR 24,924 Cr of total liabilities.

Import Sources

Not applicable for banking operations as funds are sourced domestically from Indian depositors and the interbank market.

Key Suppliers

Not applicable; the 'suppliers' are retail and corporate depositors across India.

Capacity Expansion

The bank expanded its 'capacity' to lend by increasing its Total Business to INR 5,63,909 Cr, a 14.20% YoY increase. The branch network and digital infrastructure (Digital Rupee, Digital Sanctions) serve as the primary delivery channels.

Raw Material Costs

Cost of Deposits rose to 4.67% in Sept '25 from 4.29% YoY (an 8.8% increase in cost) due to the high-interest-rate environment and competition for term deposits.

Manufacturing Efficiency

The Credit-to-Deposit (C/D) ratio improved to 82.03% in Sept '25 from 78.72% YoY, indicating higher efficiency in deploying mobilized deposits into interest-earning advances.

Logistics & Distribution

Distribution is driven by digital channels and physical branches; Staff Expenses (the primary distribution cost) were INR 822 Cr in Q2 FY26, a decrease from INR 900 Cr in the previous quarter.

📈 Strategic Growth

Expected Growth Rate

17.90%

Growth Strategy

The bank is focusing on the RAM (Retail, Agri, MSME) segment, which grew 19.68% in FY25. Strategy includes aggressive retail credit expansion (up 37.45% YoY), digital transformation for faster loan processing, and maintaining a high CASA ratio to keep borrowing costs competitive.

Products & Services

Housing loans (INR 43,041 Cr), Vehicle loans (INR 4,872 Cr), MSME credit (INR 46,554 Cr), Gold loans, Education loans, and Digital Rupee (CBDC).

Brand Portfolio

MAHABANK, Bank of Maharashtra, Mahabank Digital Rupee.

New Products/Services

Digital Rupee (CBDC) and Digital Sanctions for retail loans are expected to improve processing speed and customer acquisition, contributing to the 16.83% growth in global advances.

Market Expansion

The bank is expanding into overseas markets with an initial exposure of INR 888 Cr and continues to deepen its domestic footprint in the Infrastructure and Housing sectors.

Market Share & Ranking

Not explicitly ranked, but advance growth of 17.90% is noted as being higher than the banking industry average.

Strategic Alliances

The bank maintains JVs and Subsidiaries with a gross investment of INR 762 Cr as of Sept '25 to diversify service offerings.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward digital-first banking and NIM compression. MAHABANK is positioning itself by maintaining a high CASA of 48.13% and a low Cost of Funds (4.32%) compared to peers.

Competitive Landscape

Competes with major PSU and private banks; maintains an edge through superior asset quality (Net NPA at 0.18%) which is among the lowest in the industry.

Competitive Moat

The bank's moat is its low-cost deposit base and high CASA ratio, which allows it to maintain a NIM of 3.85% even in a rising rate environment. This is sustainable due to its strong brand presence in Maharashtra and growing digital adoption.

Macro Economic Sensitivity

Sensitive to RBI repo rate changes; a high-interest-rate environment has increased the Cost of Deposits by 38 basis points YoY, impacting the bank's cost structure.

Consumer Behavior

Increasing preference for digital banking and retail credit; MAHABANK responded with a 37.45% YoY growth in retail credit and new digital sanctioning tools.

Geopolitical Risks

Net FPI outflows of US$ 3.9 billion in 2025-26 (April-Sept) create market volatility that can impact the bank's investment portfolio valuation (AFS/HFT categories).

⚖️ Regulatory & Governance

Industry Regulations

Complies with RBI's Basel III capital requirements (CET1 at 14.05%) and SEBI LODR regulations. No non-compliance reported for the financial year ended March 31, 2025.

Environmental Compliance

The bank has initiated ESG initiatives as part of its corporate reporting, though specific INR costs are not disclosed.

Taxation Policy Impact

Profitability was supported by a low effective tax rate due to the write-off of carried forward losses in previous periods.

Legal Contingencies

Pending court cases and labor disputes exist as per standard banking operations; however, the specific aggregate INR value of all pending litigation is not disclosed in the provided documents.