Bank of Maharashtra (MAHABANK) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Systematix Group): Ladies and gentlemen, good day, and welcome to the Bank of Maharashtra Q2 FY '27 earnings conference call hosted by Systematix Group. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Purohit from Systematix Group. Thank you, and over to you, sir.
Siddharth Purohit (Systematix Group): Good evening everyone. Thank you for joining Bank of Maharashtra's Q2 FY 27 post result earning call. From the management today we have Mr. Nidhu Saxena, the MD and CEO of the bank. We thank the management for giving us the opportunity to host the call and congratulate on a strong numbers. I handover the call now to Mr. Saxena for his opening remarks. Thank you and over to you, sir.
Nidhu Saxena (Bank of Maharashtra): Thank you. And good evening to one and all. And thank you for joining this investor call. The business and the numbers for this quarter has been quite encouraging for the bank. We had set out the year with a set of guidance numbers across all metrics of growth, profitability, asset quality, capital adequacy and so on. And I'm happy to share that each one of those guidance numbers have been met. And this is getting consistently met also, is one good feature. I will quickly take you through to the highlights. The business for this September '26 has grown by 25%, within which advances have grown at the rate of 30% YoY. A large contribution significant contribution has come from the IBU, and minus the IBU also the credit growth in the bank YoY has been healthy 23%. So, all verticals of the RAM: retail, agri, MSME have grown individually and have grown more than 20%. The large credit growth which is seen is also YoY growth of 38%. So, 36,000 crores of large credit has grown YoY. And as I just said, 50%, 18,000 of this has happened in the GIFT City IBU branch of the bank, the rest 30 18,000 has happened in the domestic large credit, which is again a healthy 19% growth. as against the domestic credit growth of 23%, the deposits have also grown healthy 22% YoY. So, even if we exclude the FCNR(B), the deposit growth has happened at the YoY rate of 19%. Within which CASA has grown in the bank at 12% YoY, and bank has added in absolute terms 19,000 crores of CASA over the last FY. The NPA, GNPA also has improved, it has reduced by 47 basis points and GNPA stands at 1.25%. Likewise, NNPA also registered a reduction by 6 basis point, NNPA for the bank is at 0.12%. Provision coverage ratio is at a healthy level of 98.53%. Stress in the loan book also has been well managed. It has also reduced overall 167 bps year-on-year from 4.93 to 3.26%. Within which the SMA-1 and 2 portfolio is also shown a reduction of 50 basis point and it stands at 1.37%. And we have seen the improvement in the stress levels across the sectors: retail, agriculture, MSME, every sector has registered improvement. Above 5 crores, the NPA the s- stress is mere 0.13%. And exclude one state account it is only 0.11%, which also has improved 4 basis point. The cost of deposits and the overall cost we have been able to manage and maintain well. We have been exercising the various options of availing refinance, raising through infra bonds from time to time. Today in the bank we have an outstanding of 18,300 crores of refinance book, which is between 6 to 6.5%. Likewise infra bonds raises which happened in the last FY, outstanding is 2,400 crores. These
Nidhu Saxena (Bank of Maharashtra): has been also supporting the credit growth at reasonable and able to give reasonable profitability levels to the bank. So, cost of deposits also has reduced for the bank year-on-year by 4 basis point, stands at 4.38%. Likewise, cost of funds overall have reduction shown reduction of 25 basis points, it stands at 4.07%. So, with slippages also staying under check, profitability for the bank has been good. Operating profit has shown a growth of 31% YoY, while the net profit has grown year-on-year 41%. As a result of this, the ROE has shown a sharp improvement. ROE has improved by 440 basis point and has reached 27%, 26.98 to be precise. NIM has improved by 12 basis points to 3.97%, and the ROA has improved by 20 basis points to 2.02%. The capital adequacy is also maintained at the healthy healthy level and above our guidance number CET1 is 15.61%, and CRAR stands at 18.51%. Bank is maintaining a good LCR. The LCR is standing at 123% and NSFR at 127%. So, this is overall highlight from my side. I think we should take some questions from the investors.
Moderator (Systematix Group): Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator (Systematix Group): as they will be in listen only mode, and there will be an opportunity for you to ask questions, after the presentation concludes. Should you need assistance during this conference, please signal the operator by pressing "*" then "0" on your touch-tone phone.
Moderator (Systematix Group): The first question is from the line of Ashok Ajmera from AJCON. Please go ahead.
Ashok Ajmera (Ajcon): Yeah thanks. The name of my company is Ajcon. Thank you for this opportunity. Congratulations Nidhu sir and the entire team of Bank of Maharashtra for yet another very good quarter for a good set of numbers. It's fantastic result. In fact, we have reached many of the milestones. The business for the first time, I think has crossed 7 lakh crores, if I'm not wrong. Credit is also more than 3 lakhs, crossed for 3 lakh crores. Your EPS for the first time has gone about ₹3. ROA is about two and many many more such milestones and the records which you have created in this quarter and the half year. Congratulations for that, sir. Having said that I have got some couple of data points, some observations, and some questions. Sir, on the provisioning side there is a low provision for the I mean the provision for the standard asset and the restructured asset has gone up to 603 crores from 76 crore in the last quarter. But at the same time in the contingency side, which was for the COVID-19, we are gradual- gradually reducing our provision from 1200 crores to now in 3-4 quarters coming down to 510 crores. Coupled with that the ECL provisioning, which is required to be done. All these three questions you know have must be having only one answer from your side. What is our ECL preparedness? How much do we need to provide, and how are we prepared for it, sir?
Nidhu Saxena (Bank of Maharashtra): Thank you, thank you, Mr. Ajmera. I think you you have covered the the top-line also issue, let me confirm that yes, business for the bank crossed 7 lakh crores for the first time. Coming to the second part, which is provisions, so I will just like to highlight that provisions for NPAs and provisions for standard, I will give you the number. The NPA provisions September '25 quarter last year, June '26, that is the Q1 of this FY, and September '26, the current quarter we are discussing. The number, you must have seen, reduced number. So 580 has come down to 120. So, there are two broad reasons around this. One is that with the high provision coverage ratio, we are maintaining of 98.5% plus, our increment incremental requirement that comes every quarter for providing for NPAs is a very nominal amount. This particular quarter also, we have experienced good recovery in the Q2, and even the updation number has been good. Yes, there is a support also from the some recoveries in the debt waiver has come, because that book also was 100%, I me- I mean we were holding six- with 98.5% provision. We were holding it was almost 100% provided for book, and whatever recovery has come also has aided towards that. So, net this is one reason that this provision for NPA requirement has got reduced, and this is how it is. Second, the standard provision book, if you see, 158 crores was last year, this year was 603 crores. So, this is on account of ECL provisioning that we have done of 500 crores. So, that's how in the standard assets you are seeing that provisioning has increased. Number has increased from 150 to 600 crores. And in terms of ECL provisioning requirements, we had our assessments done way back when this draft guidelines were under discussion. And 250 crores upfront front-ending we had already done previously for ECL. This quarter we have done 500 crores. Our total assessment was that 2,500 crores is our ECL provisioning to be done in 4 years. Yes, we've put some system in place and validation is going on. Maybe this number appears to even go down, but
Nidhu Saxena (Bank of Maharashtra): assuming 2500 crores today with 250 plus 500 in this quarter, 750 crores of ECL provisioning that we have already done, this is covering more than one-year requirement. So FY '27, '28 we have provided for in terms of ECL already by September '26. Going forward, we see no challenge in making the provisions.
Ashok Ajmera (Ajcon): All right, sir. Point well taken, sir, on this. Sir, the credit growth is also phenomenal and some part of it, the credit goes to IBU also. You said the large credit of 18,000 crore came from the IBU. So is it going to be and and and must be some credit growth might have come for the lending on the FCNR deposit which you've collected through the IBU, I think the credit must have gone. So do you think that this kind of credit growth will be maintained, because your overall target for the year is much, much lesser than what you already achieved in this half year. So where do we, like, from the credit growth point of view, whether this momentum is going to be continued now when there is no opportunity for the FCNR that special window which was opened? And along with that, this recovery also from the return of account, which has been exceptionally high in this quarter, 737 as compared to 305 crore in the last quarter, whether that trend is also going to continue so as to give a color on the future profitability of the bank?
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