1. At a Glance
Bank of Maharashtra (BoM) is quietly becoming the PSU bank dark horse — leaner NPAs, soaring profits, and a 5-year CAGR that makes fintechs blush. But with 79.6% still held by the government, is this a true turnaround or a well-orchestrated illusion?
2. Introduction with Hook
Imagine a kid who flunked every subject till Class 10 suddenly topping JEE Advanced. That’s Bank of Maharashtra.
Once the “why-do-you-exist” PSU, BoM has clocked:
- 70% profit CAGR in 5 years
- Net NPA down to a literal rounding error at 0.18%
- ROE zooming to 23% in FY25
From being the background extra in the PSU drama, BoM now demands a main role. And possibly a dance number.
3. Business Model (WTF Do They Even Do?)
Like all banks, BoM collects deposits, gives loans, and tries not to go bankrupt. But let’s break it down:
- Retail Banking: 39% of revenue in FY24. You, me, your aunt’s fixed deposit.
- Corporate/Wholesale Banking: 36%. Loans to infrastructure projects, MSMEs, etc.
- Treasury: 21%. Government bonds, SLR, all that jazz.
- Others: 4%. FX, fee-based income, perhaps a few lucky guesses.
What’s changed? Retail’s rising share and better credit discipline. They’re finally doing banking… like a bank.
4. Financials Overview
plaintextCopyEditFY25 (Rs Cr)
Net Profit : ₹5,542
Revenue : ₹24,948
EPS : ₹7.21
ROE : 23%
Gross NPA : 1.74%
Net NPA : 0.18%
Dividend Yield : 2.62%
Book Value : ₹37.3
- NPA clean-up = investor confidence
- EPS doubled in 2 years = the stock price party is justifiable (kinda)
5. Valuation
With a P/E of 7.6 and ROE of 23%, BoM is dirt cheap… or hiding a monster under the carpet?
- Graham-style Valuation: Intrinsic = EPS × (8.5 + 2g) = 7.21 × (8.5 + 14) ≈ ₹162
- PBV-based: Fair P/B = ROE/COE = 23/13 ≈ 1.77 → FV = 1.77 × ₹37.3 ≈ ₹66
- Earnings Yield: 13% vs G-sec 7% = undervalued zone
EduFair Value Range: ₹66–₹95
6. What’s Cooking – News, Triggers, Drama
- Govt stake reduced from 90.9% to 79.6% — hinting at slow privatization prep.
- Stable NPAs despite COVID provision overhang of ₹1,200 Cr (already absorbed!)
- Q1FY26 net profit: ₹1,504 Cr — up 16% YoY
- Working capital days now just 12.6 — from 38!
Next: Full digital bank reboot? Tie-up with fintechs?
7. Balance Sheet
| Particulars (₹ Cr) | Mar 2025 |
|---|---|
| Equity Capital | 7,692 |
| Reserves | 21,016 |
| Deposits | 307,120 |
| Borrowings | 23,853 |
| Total Assets | 369,354 |
Key Points:
- Capital base solid post recapitalization
- Loan book now funded more by deposits than borrowings
- Improving CASA ratio not shown, but likely rising
8. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY25 |
|---|---|
| Operating Cash Flow | ₹7,628 |
| Investing Cash Flow | -₹495 |
| Financing Cash Flow | ₹4,750 |
| Net Cash Flow | ₹11,883 |
Interpretation:
- Healthy OCF → Bank is earning, not just “borrowing to survive”
- Capex light (₹495 Cr) = tech stack over branch infra
- Big financing inflow = equity/AT1 capital? Check notes.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 23% |
| ROA | 1.53% |
| EPS | ₹7.21 |
| Gross NPA | 1.74% |
| Net NPA | 0.18% |
| Dividend | 21% payout |
Verdict:
Most PSU banks look like they smoke bidis behind RBI’s back. BoM? It’s now sipping herbal tea and reading Nassim Taleb.
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) |
|---|---|---|---|
| FY23 | 15,899 | 2,605 | 3.87 |
| FY24 | 20,495 | 4,072 | 5.75 |
| FY25 | 24,948 | 5,542 | 7.21 |
- EPS nearly doubled in 2 years
- Profit CAGR 70% — which is faster than your monthly Uber bills
- Interest income growth aligned with deposit growth: finally efficient
11. Peer Comparison
| Bank | P/E | ROE % | GNPA % | Dividend % |
|---|---|---|---|---|
| SBI | 9.5 | 17.2 | 2.8 | 1.92% |
| Canara Bank | 6.0 | 17.7 | 4.2 | 3.46% |
| Bank of Baroda | 6.2 | 15.5 | 3.3 | 3.39% |
| Indian Bank | 7.6 | 17.1 | 3.0 | 2.55% |
| BoM | 7.6 | 22.8 | 1.74 | 2.62% |
Conclusion:
BoM is giving Big Boys a run for their bandwidth — especially on NPAs and ROE.
12. Miscellaneous – Shareholding, Promoters
- Promoter (GoI): 79.6% (room for OFS?)
- FII Holding: Up from 0.2% → 1.72% in just 1 year
- Public Participation: Rising steadily (hello retail frenzy)
- Shareholders: 10 lakh+ — also your neighbor aunty.
13. EduInvesting Verdict™
Bank of Maharashtra isn’t your classic PSU yawn-fest anymore. This one cleaned up its NPAs, scaled retail like a private bank, and now posts numbers that feel… unreal (in a good way).
Sure, there’s the ever-looming “government interference risk” and debt capital needs, but BoM is perhaps one of the only PSU banks that seems to have genuinely graduated from remedial classes to topping the batch.
This isn’t just a value pick. It might be the value pick that finally gets growth stocks to swipe right.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: Bank of Maharashtra, PSU Banks, ROE, Valuation, NPA, Turnaround Stories, Financial Sector
