Bank of Maharashtra (MAHABANK) Q1 FY27 Earnings Call: Advances Surge 27%, NIM Beats Full-Year Guidance

Bank of Maharashtra held its Q1 FY27 earnings call on July 10, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline P&L and Growth Metrics

• Net profit of Rs.2,020 Crin Q1 FY 2026-2027, up 27% YoY, with operating profit growing 21% YoY to Rs.3,117 Cr.
• Total business grew 19% YoYadding Rs.1,04,000 Cr over the past year; total advances surged 27% YoY (vs 18% guided) to Rs.65,000 Cr added, while total deposits grew 13% YoY (vs 14% guided).
• NIM stood at 3.85%in Q1 FY 2026-2027, down 10 bps sequentially but 10 bps above the 3.75% full-year guidance, with NII growth of 14.5% lagging advances growth.
• ROA improved 10 bps YoYto 1.9% and ROE improved 165 bps YoY to 24.65% in Q1 FY 2026-2027.
• Credit cost declined 20 bps YoYto 0.99%, remaining below the guided 1% level for Q1 FY 2026-2027.
• CET1 capital adequacy at 15.56%and CRAR at 18.64%, with a board-approved equity raise of Rs.5,000 Cr for FY 2026-2027 pending government approval (RBI and shareholders already approved).

NPAs, Stress, and Buffer Strength

• Gross NPA improved to 1.45%(guided below 2%), Net NPA to 0.13% (guided below 0.25%), and PCR reached 98.55% in Q1 FY 2026-2027.
• Stress percentage (overall loan book) improved 140 bps YoYto 3.18%; SMA 0+1+2 book improved 5 bps to 1.34%.
• Retail NPA at 0.34%, agri NPA at 7.58% (down from 9% earlier), MSME NPA at 1.60%, total RAM NPA at 1.23%— retail and MSME NPAs increased QoQ in absolute terms, though management termed this not a serious concern.
• Underwriting tightened: loans with CIBIL score <681 completely stopped; in home loans (50% of retail book), 80% of sanctions in the past 12 months were to prime/super-prime borrowers (CIBIL >750).
• ECL provisioning under RBI guidelines— management cited "ECL provisioning under final RBI guidelines: total requirement of ~Rs.2,500 crores over a 4‑year path to 31 March 2031" implying ~Rs.125 Cr per quarter; already Rs.255 Cr booked. ECL provisions impact net worth, not P&L, and quarterly profit is now allowed in CRAR calculations.
• COVID provisions peaked at ~Rs.1,200 Cr; restructured book of ~Rs.1,050 Cr is 100% provisioned (above required levels). Management plans to gradually write back these provisions over future quarters.
• Recoveries in Q1 FY 2026-2027 were Rs.709 Cr(cash Rs.490 Cr, upgrades Rs.208 Cr); recovery from the write-off book was Rs.305 Cr.

Funding, CASA, and Cost of Deposits

• Deposit growth of 13% YoYin Q1 FY 2026-2027 with zero CD issuances, compared to PSB average of 10% (ex-CDs) and private banks' core deposit growth of 11%.
• CASA grew 9% YoY to Rs.1.28 lakh Crbut declined sequentially by ~Rs.2,500-3,000 Cr due to seasonal factors; management cited 200 new branches per year and a revamped mobile app (active users from 2.75 lakhs to 14 lakhs) as drivers.
• Cost of deposits improved 22 bps YoY to 4.38%in Q1 FY 2026-2027, but up 5 bps QoQ driven by retail TD growth (16% vs total deposits 13%) and CASA-to-TD shift.
• Effective CD ratio at 81.99%including refinance of Rs.19,000 Cr (up from ~Rs.14,000-Rs.15,000 Cr in FY 2025-2026), raised at 6-6.5% with no CRR/SLR loading, providing a viable alternative to high-cost bulk deposits.
• Management noted a "secular shift of consumers to other asset classes (SIPs, mutual funds)"as a structural challenge for deposit mobilisation, considered irreversible even in tier 2/3 cities, justifying the use of refinance and CDs.
• FCNR deposit rate revised to 6.60%to attract dollar deposits; major traction expected in August-September (Q2 FY 2026-2027).

Portfolio Mix, Yields, and Growth Drivers

• RAM (Retail, Agri, MSME) to corporate book ratio maintained at 63:37, with retail growing 25%, agri 30%, MSME 23%, and corporate book 30% YoY in Q1 FY 2026-2027.
• Gold loans surged 75% YoY to Rs.13,000 Cr; corporate book grew 30% YoY, with credit growth guidance for FY 2026-2027 maintained at 17-18% despite Q1 YoY growth of 27%.
• Global yield on advances declined 71 bps QoQ to 8.57%in Q1 FY 2026-2027 (domestic yield 8.66%), driven by MCLR reset from past rate cuts in FY 2025-2026.
• Loan book composition: 53% repo-linked and 44% MCLR-linkedas of Q1 FY 2026-2027; management expects a yield benefit in a repo rate hike scenario for FY 2026-2027.
• Management has raised MCLR in the last two ALCO meetingsof FY 2026-2027, expecting yields to improve as accounts reset over the next year.
• Under ECLGS scheme, the bank sanctioned Rs.4,500 Cr(65% of eligible portfolio of Rs.6,700 Cr) with Rs.3,560 Cr (82%) disbursed; MSME segment accounted for Rs.2,700 Cr vs Rs.400 Cr for corporates.

NII Trajectory, Rate Sensitivity, and Treasury

• NII growth of 14.5% lagged advances growth of 27%in Q1 FY 2026-2027, but management maintained NII growth guidance of 15% and NIM guidance of 3.75% for FY 2026-2027.
• NIM of 3.85% in Q1 FY 2026-2027came in 10 bps above the 3.75% guidance, though down 10 bps sequentially; management suggested advances yield may increase going forward for FY 2026-2027 due to repo-linked loans and MCLR resets.
• Deposit cost improved 22 bps to 4.38%; management noted further rate cut expectations have faded due to the West Asia crisis, "with a possible rate review" — suggesting a neutral to slightly hawkish rate outlook.
• Treasury income of Rs.266 Crin Q1 FY 2026-2027 included a one-time SR component of Rs.104 Cr; additional SRs expected in subsequent quarters but no specific profit target given.
• Net worth rose by Rs.488 Crfrom AFS revaluation reserves during Q1 FY 2026-2027.
• Opex growth of ~8-9%in Q1 FY 2026-2027 versus balance sheet growth >20%; management does not view this as a one-off and expects continued operating leverage, with cost-to-income guidance to maintain below 40% (current range 36-38%).

FY 2026-2027 Targets, Risks, and Strategic Priorities

• Management maintained FY 2026-2027 guidance: advances growth 17-18% (Q1 came in at 27%), NIM at 3.75%, credit cost below 1%, and cost-to-income below 40% (current 36-38%).
• Board-approved equity raise of Rs.5,000 Crfor FY 2026-2027 pending only government approval (RBI and shareholders already approved); management reiterated commitment to delivering on guidance and intent to over-deliver where possible.
• 200 new branches per year planned; branches opened >3 years ago are all profitable, and a significant percentage of 2-3 year old branches have reached break-even.
• Tax rate on PBT basis guided at 16-17%for FY 2026-2027, benefiting from rural advances (~40% of branches in rural areas), bad debt write-offs, and DTA.
• FII shareholding increased from 0.39% to 6.08%and DII shareholding (ex-LIC) from 0.24% to 7.42% over the two years leading up to Q1 FY 2026-2027.
• Maharashtra debt waiver scheme (government, still under formulation)— management cited eligible portfolio of Rs.3,500 Cr, government receivable of Rs.2,750 Cr, farmer contribution of Rs.260 Cr, and a max haircut of Rs.450-500 Cr; bank already holds Rs.1,700 Cr provisions and Rs.1,100 Cr TWO on eligible accounts, so net P&L impact is expected to be limited.
• SMA 2 jumped from Rs.56 Cr to Rs.208 Crdue to a single government entity account of Rs.87 Cr (state government corporation outside Maharashtra), which management considers temporary; overall SMA 1+2 improved 5 bps to 1.34%.