Bank of Maharashtra Q3 FY26 – ₹1,799 Cr Quarterly PAT, ROE ~23%, GNPA 1.6%: PSU Bank Doing Pull-Ups While Others Stretch
1. At a Glance – The PSU That Quietly Stole the Gym Membership
Bank of Maharashtra is currently that silent guy in the gym who never posts reels but suddenly lifts twice your bodyweight. At a market capitalisation of roughly ₹50,000 crore and a current price hovering around ₹65, the bank has delivered a ~41% one-year return and about ~10–11% in just the last three months. Stock P/E sits near 7.7, price-to-book at ~1.5, and ROE around a spicy 22–23%. Dividend yield? A respectable ~2.3%, because this PSU believes in sharing, not hoarding.
But the real flex is the latest quarterly performance. Q3 FY26 delivered a PAT of ₹1,799 crore, up ~27% YoY, with quarterly revenue crossing ₹7,300 crore. Asset quality is cleaner than your CA’s Excel sheet before audit day, with Gross NPA sliding to ~1.6% and Net NPA near 0.15%. Cost-to-income has compressed meaningfully over the last two years, while NIMs have expanded to ~4% levels.
So the obvious question: since when did Bank of Maharashtra decide to stop being a sleepy PSU and start behaving like a private bank in a khadi kurta?
2. Introduction – From PSU Meme to PSU Dream
For years, Bank of Maharashtra lived in the “PSU Bank Starter Pack” meme category. Low profitability, high NPAs, capital infusion headlines, and investors who bought only because “sarkar hai, doobega nahi”.
Then something quietly changed.
Between FY22 and FY24, the bank didn’t just repair its balance sheet; it went full Marie Kondo on it. NPAs were aggressively cleaned, provisioning coverage pushed near 100%, and the loan book was reshaped toward retail, agri, and MSME without completely abandoning corporate lending. Treasury dependence reduced, operating efficiency improved, and suddenly ROE doubled from ~11% to ~23%.
This wasn’t one lucky quarter. This was a multi-year turnaround with consistent quarterly execution. Revenues compounded, profits exploded at nearly 70% CAGR over five years, and even market perception began shifting from “PSU risk” to “PSU surprise”.
Yet, despite all this, the valuation still sits below many peers. Which raises an uncomfortable question for the market: are we underestimating how far this turnaround can go, or is this already peak PSU performance?
3. Business Model – WTF Do They Even Do?
At its core, Bank of Maharashtra does what banks are supposed to do: take deposits, lend money, earn spread, pray borrowers pay back, repeat. But the internal mix has evolved meaningfully.
Retail banking now contributes ~39% of revenue, up from ~35% in FY22. Corporate/wholesale banking stands around ~36%, also up. Treasury, once a lazy comfort zone at ~32% of revenue in FY22, has dropped to ~21%. Translation: less bond-market jugaad, more real lending.
The RAM portfolio (Retail, Agriculture, MSME) now forms ~61% of advances. That’s important because RAM loans typically give better yields and diversification. Corporate loans still exist, but they’re no longer the single point of cardiac arrest.
On the funding side, CASA still forms ~53% of deposits. Yes, it has declined from earlier highs, but in a rising rate environment, that’s not exactly a crime. Deposits have grown faster than advances, keeping liquidity comfortable.
And now the bank wants more. In May 2024, it announced a new vertical focused on payments, collections, channel finance, vendor financing, payroll solutions – basically trying to squeeze more fee income out of existing relationships. Less “sir loan chahiye”, more “sir full financial ecosystem le lo”.
Question for you: can a PSU bank really cross-sell like a private bank, or will this remain PowerPoint ambition?
4. Financials Overview – Numbers That Slap
Quarterly Comparison Table (₹ Crore)
Metric
Latest Qtr (Q3 FY26)
Same Qtr LY
Prev Qtr
YoY %
QoQ %
Revenue
7,344
6,325
7,128
~16.1%
~3.0%
EBITDA / Operating Profit*
1,075
675
973
~59%
~10%
PAT
1,799
1,412
1,669
~27.4%
~7.8%
EPS (₹)
2.34
1.84
2.17
~27%
~7.8%
*For banks, operating profit is represented by financing profit.
Annualised EPS based on latest quarter comes to roughly ₹9.4. Against a stock price of ~₹65, you’re looking at an implied P/E of ~6.9 on annualised numbers – cheaper than your neighbourhood vada pav.
The commentary writes itself: margins are expanding, costs are controlled, credit quality is improving, and profits are compounding. For a PSU bank, this is borderline offensive to stereotypes.
5. Valuation Discussion – Fair Value Range Only
Let’s be boring and responsible for five minutes.
1. P/E Method
Annualised EPS: ~₹9.4
Reasonable PSU bank multiple range: 7× to 10×
Fair Value Range (P/E): ₹66 – ₹94
2. EV to EBITDA (Operating Profit)
EV: ~₹3.9 lakh crore
Annualised operating profit: ~₹4,300 crore
EV/EBITDA multiple range: 15× to 18×
This broadly supports current valuation with moderate upside if profitability sustains.
3. Simplified DCF (Sanity Check)
Assuming:
Long-term profit growth: conservative low-teens
Cost of equity: PSU-appropriate high single digit to low double digit
DCF doesn’t scream “crazy undervalued”, but it doesn’t scream “bubble” either.
Final Fair Value Range (Educational Only): ₹70 – ₹95
This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Recent quarters have been eventful. The government diluted ~6% stake via OFS, reducing promoter holding to ~73.6%. Normally, PSU investors panic at OFS news. Here? The stock digested it calmly. That’s confidence.
The bank declared an interim dividend of ₹1 per share. Capital adequacy remains healthy at ~17.4%, despite growth. Credit ratings upgrades from multiple agencies signal improved external confidence.
One spicy disclosure: reported frauds of ~₹807 crore and associate impairment of ~₹290 crore. These are reminders that banking is never a fairy tale. But importantly, they didn’t derail profitability
