← Throughline · holding view Deep analysis ↗ Q3 FY26
MAHABANK Bank of Maharashtra · Other Q3 FY26 · concall
Pattern: home loan rate prime

MAHABANK closed FY26 at INR7,019cr net profit (+27%), NIM 3.91% vs 3.75% guidance.

3 weak · 13 clean — pushback across 3 of 16 Q&A turns

Focused evidence 3 of 16

Mahrukh Adajania · Nuvamaweak

What is your home loan rate for prime customers and what is your average yield on gold loans?

We charge 7.1% for home loan borrowers but not all qualify - the best rate is for CIBIL 800+. There's a graded slab. We don't underwrite below CIC score 681 (TransUnion CIBIL). On gold loans we have three products - agri gold (lowest rate, up to INR2 lakhs), MSME gold (up to INR10 lakhs) and retail non-priority. Average yield around 9% (includes agri). We are the leading bank in NBFC co-lending tie-ups, with seamless digital API integration - INR5,500 crores in that segment with good pricing, no safekeeping or insurance cost. Co-lending rates are negotiated one-on-one and we won't disclose those.

Rohit Priyadarshi · Mittal Analyticsweak

Yield on advances reduced from 9.27% last December to 8.92% this December. Reasons for the decline - loan mix or lending rate cuts? What is your yield guidance for coming quarters?

Yield on advances stands at 8.95%. There has been 125 bps rate cut from regulator that we have to pass on without time lag - around 40-42% of our portfolio is repo-linked and gets immediate benefit. Deposit pricing comes with lag. Before the rate cut cycle (Feb 2025), we had done 30-35 bps MCLR raise in the prior 10-12 months. About one quarter of MCLR portfolio (which is ~55% of book) remains to be repriced. Good rated borrowers approach us with concessions which we sometimes accommodate to retain business. New rate cuts open new opportunities for lending - home buys, GST cuts empower spending. Yield may soften slightly but volumes more than compensate. Management added: We don't have guidance on yield on advances. We have a guidance on NIM, we are targeting to maintain at about 3.75%, and we will maintain it.

Akshay Badlani · HDFC Securitiesweak

Yields have dropped over 25 bps this quarter while the rate cut happened at quarter end. Why such a big yield drop on advances? On cost of fund - 22 bps reduction - is it term deposit repricing or also savings rate cuts?

We keep reviewing interest rates across spectrum of products including savings deposits. There are two CASA components - institutional CASA (which we approach with custom technology solutions for transactional/payment/collection needs) and retail core CASA via branches. We've revamped our mobile app - new version got first 1 lakh downloads in 14 days vs 7 months for old version; today 6 lakh active users versus 225,000 previously. On yields - earlier was not full quarter rate cut impact. Good rated borrowers demand concessions; we compensate via ancillary business - payroll, payments/collections, deposits. We have not seen NIM, ROA, ROE contraction. NIM actually expanded 2 bps despite 25 bps rate cut. Next quarter gets full impact.

▸ Other Q&A (13)
Ashok Ajmera · Ajcon

While in this quarter we have grown on both credit and deposits, the 9-month deposit growth is only 4.73%. To reach the 14% target you'd have to raise INR29,000-30,000 crores in Q4. Are you confident of bridging this gap? CD ratio is now 85% and CRAR has come down to 17.06%.

The 14% deposit guidance will be maintained. Within deposits, the low-cost component grew - CASA grew 16% year-on-year this quarter and 14% last quarter, while total deposit grew 15%. Very consciously this has been our strategy for the last couple of quarters to let high-cost bulk deposits leave - we don't need that funding. We raised INR14,000-15,000 crores via refinance transactions at a blended rate of 6%-6.5% with no CRR/SLR overhang. Bulk deposits degrew 7% year-on-year this quarter. The DRI component fell from 13% to 5.08%. CD ratio rising is an outcome of this conscious strategy. Lot of things happen in Q4 and 14% will be achieved.

Ashok Ajmera · Ajcon

Treasury suffered a loss of about INR180 crores compared to INR99 crores profit last quarter. Segment-wise treasury profit also dropped to INR136 crores against INR433 crores. Going forward, how do we offset these treasury losses?

CASA percentage has actually improved by 26 bps year-on-year this quarter. In terms of treasury income, there is a one-off INR290 crores hit due to Maharashtra Gramin Bank and Vidarbha Konkan Gramin Bank amalgamation. If you exclude that one-off, treasury would have shown a quarterly profit of around INR115 crores - INR112 crores.

Ashok Ajmera · Ajcon

Segment-wise, retail book profit jumped to INR1,050 crores from INR673 crores while wholesale moved from INR680 crores to INR802 crores. Is there reclassification of gold or agri loans between retail and wholesale, or what explains the high jump in retail profitability?

The retail segment growth is driven by home loans growing 28% YoY, vehicle (focused on big-ticket business with existing clients) at 54%, gold loan at 56%. We've also signed 9 co-lending partnerships, majorly in gold, along with housing and MSME co-lending arrangements. Simultaneously we are growing corporate book at 19% YoY versus industry single-digit growth. We've done green financing, renewable energy projects, data centers, EV segment funding. Contribution will keep coming from all sectors where risks are manageable and opportunities profitable.

Ashok Ajmera · Ajcon

Our slippages this quarter have gone a little higher at INR700-750 crores compared to a range of INR650-700 crores. Is there any one-off of INR100-200 crores or is it normal?

Slippages ratio is 1.2% - same as last year and a year before, so nothing alarming. On treasury, excluding the MGB one-off, last year entire net profit on investments was INR220 crores, and excluding the one-off this year, 9-month profit is INR352 crores showing marked improvement. FX operations - last year full year INR63 crores, this year nine months INR107 crores. Core operations profit is improving.

Mahrukh Adajania · Nuvama

Is it fair to say you had no impact from the new labor codes, including gratuity contribution?

We have done our assessment. It is a very small amount - around INR33 lakhs - keeping in account contractual and regular employees. The number is insignificant and needs no discussion. With the new labor code, new rules are probably under framing - we will keep a watch on impacts. Yes, this includes gratuity contribution.

Mahrukh Adajania · Nuvama

LDR has shot up across the system. System LDR is 82% and RBI has historically gotten worried at 80%. Do you foresee any regulator action or soft nudge given the system LDR is rising above 80%?

Our LDR guidance is to maintain around 83%-84% in present circumstances. We feel this is the best prescription for good profitability. We've looked at alternative sources including infrastructure bonds. There is no prescription from the regulator, no soft nudge so far. We are mindful and focused on raising core stable business through branches rather than chasing bulk deposits via rate. We are running Project 321 - 321 branches selected at PIN code level to be opened in 18 months. 116 are already functional. These will generate core individual deposits.

Rohit Priyadarshi · Mittal Analytics

How focused are we on increasing MSME loan book, and what yield can we expect? Since MSME gives higher yields, will this help overall yield improvement?

We're into wherever we see profitable opportunities and where we're comfortable building exposures. Low-ticket MSME journeys have been digitalized end-to-end. We've been growing MSME high double digit at 15-16%. The September quarter showed single-digit growth in MSME and agri because of our conscious rebalancing - replacing some portfolio with higher-quality business. Now we've improved drastically. We've focused on big-ticket agri and MSME, shifting from production finance to investment credit - rice mills, dal mills, warehouses, cold storages. We have primary and collateral securities. Yes, MSME pricing is good and there's not much competition - 20-25 bps premium is paid happily when service is expeditious.

Jai Prakash Mundhra · ICICI Securities

During the quarter, RBI opened the window for MSME dispensation to export units. What quantum of moratorium requests have you received from export customers?

Total amount for the MSME for this compensation, whatever the RBI guidelines have come, it is around INR5,000 crores. Already we have started the process and it is undergoing. These are predominantly exporters impacted by US tariffs. The window closes on 31st January.

Jai Prakash Mundhra · ICICI Securities

What was the LCR at end of Q3? With higher LCR requirement on mobile and Internet Banking from April 1 but lower risk weights on bulk/NBFC deposits, what is the net impact?

Internal guidance is to maintain LCR between 115%-120%. LCR for Q3 is 116.36%. CRO added: On 1st April, considering the net outflow positive impact on banks is around 3% - so the net impact will be positive on LCR. You need not shore up liquidity; if at all there will be some release of liquidity.

Jai Prakash Mundhra · ICICI Securities

On total gold loan - retail is around INR12,000 crores. What is the total including agri and MSME gold?

Retail gold is INR12,000 crores, agri INR9,000 crores, MSME (new product post-regulator guideline) INR1,000 crores. Growing at 40-45% YoY - 18 months ago portfolio was INR7,500-8,000 crores; today including co-lending we stand at INR22,000 crores. Excluding INR5,000 crores co-lending exposure, INR16,500-17,000 crores is through branches. We've supplied gold safes from day 1 to the 116 Project 321 branches. Gold loan is not just South-based anymore - huge unorganized market still to be captured.

Ashlesh Sonje · Kotak Securities

What is the proportion of term deposits yet to be repriced at lower rates? What proportion of home loan disbursements happen at the 7.1% rate? On loan purchases of INR5,000 crores this quarter and INR12,000 crores in 9M - what type of loans and from whom?

On deposit repricing - our typical maturity profile is 8-10 months versus industry 12-15 months. Most deposits by now have been repriced. About 18-20% is likely to be repriced during this quarter. On 7.1% rate - 23% of sanctions in last 12 months went to CIBIL 800+ borrowers (entitled to 7.1%); 57% went to 750-800 bucket; so 80% combined. When selling one home loan, field mandate is to sell minimum four products on day 1 - co-branded credit card, group credit life, operative account or three EMIs as deposit. On pool transactions - we are reducing overdependence on pool. Dec 2024 became first quarter showing YTD pool degrowth - minus 7% YoY. Some pool was taken in last 1-2 quarters for the agri/MSME rebalancing - but we will shift back to branches doing core stable business. Pool is purely a central office call for PSL or profitability.

Ashlesh Sonje · Kotak Securities

Fair to assume that the term deposit book is largely repriced now and no more repricing should be expected?

About 18% to 20% is likely to be repriced during this quarter. Some part is repriced. Moreover, after RBI rate cut there are multiple rate revisions at the bank level. About 18% repricing is expected during this quarter.

Bhavesh Kanani · UTI AMC

On MSME rebalancing - within MSME, medium entities book seems to be degrowing dramatically. Sectoral GNPA suggests medium enterprises are improving, so why rebalance? On agri infra and agri ancillary - what kind of borrowers? On other expenses - sharp sequential spike, any one-off?

MSME limits got enhanced by regulator - portfolio shifts from MSME mid to small, and corporate accounts moved to MSME. Separately, we're rebalancing TReDS book - we want exposure in normal credit (term loan/working capital) of those final purchasers, not just bill discounting. Centralized MSME TReDS underwriting at zone-level discontinued. Did CMR 1-5 cutoff - no underwriting below CMR 5. September 2025 MSME growth was 2-4% suboptimal; now 8% YoY, will return to double-digit. On agri - ancillary (rice mills, dal mills, food processing) growing; farm credit degrowth because of stress experienced. On other expenses - we opened 165 new branches; revaluation depreciation; IT capex expenses. YoY 11% increase. Specific one-off this quarter is INR63 crores of PLC certificates in rebalancing - we've come out of that, won't be seen next quarter. Cost-to-income at 37.19% - best in industry, even private banks don't have that metric.

▸ Prepared remarks (5 blocks)
Good evening, everyone. We have the following members of management with us today: Mr. Nidhu Saxena, Managing Director and CEO; Mr. Rohit Rishi; and Mr. Prabhat Kiran, Executive Director; along with Chief General Managers and General Managers of the bank. I will now hand over the call to the management, Mr. Nidhu Saxena, Managing Director and CEO, to walk us through the quarter.
Thank you, and thank you all for joining this con call. We have finalized our results today, and I would say, this has been yet another quarter where we have consistently and, I would say, for the last couple of years, one of the best quarters in terms of profitability also. But before that, let me share that the guidance that we had kept in the beginning of the year, the first 2 quarters and now this Q3, we are well above our guidance numbers. On all the parameters, we have been achieving our guidance. So total business, against our guidance of 15% growth year-on-year, 17.24%, and we reached INR5,95,000 crores. Total deposits have increased by 15.3% against the guidance number of 14%. Advances have increased at 19% -- sorry, advances against the guidance of 17%, have increased by 20% year-on-year. Then CASA share has been maintained at above 50%. We are doing 50% this year also -- this quarter also. Our RAM to Corporate share, which was 60-40 plus/minus 2, we have done 63-37 share. RAM growth against the guidance of 20%, we are exceeding that number also. Within the Retail, the verticals that are growing in the bank, Home Loans have grown year-on-year at 28%; vehicle loans, 54%; Gold Loans, 56%. Retail overall has grown at 36% year-on-year. Our stress in the loan book is very well managed. We have improved on these metrics also. Overall, stress number stands at 3.35%, within which SMA1 plus 2 is 1.69%, which is an 18 bps improvement. In terms of above INR5 crores, the stress stands at 0.19%. The gross NPA and the NPA, the numbers are also very well managed. Our gross NPA in terms of percentage has got reduced from 1.72% in the last quarter to 1.60% this quarter.
The net NPA has improved from <strong>0.18%</strong> in the last quarter to 0.15% this quarter, and we are well within our guidance that is to maintain our gross NPA less than 2% and net NPA at less than 0.25%. The ROA, ROE and NIM numbers; against the guidance of 3.75%, we have achieved 3.87%. ROA guidance, 1.75%, we have achieved 1.86%. ROE guidance to maintain ROE above 20%, we have actually achieved in this quarter 23.79%. Our cost-to-income is to be maintained below 40%. Against that guidance, we have done 37.19%. Yield on advances stands at 8.95%. We have experienced also reduction in our costs, and cost of fund stands at 4.10%. Cost of deposits stands at 4.47%. Overall, the profitability has been good in this quarter. We have been able to clock our highest ever quarterly profit of INR1,779 crores and the 9 months net profit has exceeded INR5,000 crores, which stands at INR5,005 crores. We are maintaining a healthy CRAR against the guidance of keeping the number above 16%. We have a CRAR of 17.06%. CET1 is maintained at 13.10%. In these 9 months, we have also seen OFS issuance by the government, and we are today an MPS-compliant bank with GoI holding standing at 73.6%. Ratings during the year. Beyond the international rating from Fitch, we had approached S&P Global, and they assigned us a BBB - Stable rating in September 2025. Our long-term rating is AA+ Stable from ICRA and CARE. Short-term rating is A1+ from CRISIL. Looking at this good profitability, we have also looked at considering payouts in terms of interim dividend. I'm happy to share that 10% interim dividend has been approved by our Board today.
So total business, against our guidance of 15% growth year-on-year, 17.24%, and we reached INR5,95,000 crores. Total deposits have increased by 15.3% against the guidance number of 14%. Advances have increased at 19% -- sorry, advances against the guidance of 17%, have increased by 20% year-on-year. Then CASA share has been maintained at above 50%. We are doing 50% this year also -- this quarter also. Our RAM to Corporate share, which was 60-40 plus/minus 2, we have done 63-37 share. RAM growth against the guidance of 20%, we are exceeding that number also. Within the Retail, the verticals that are growing in the bank, Home Loans have grown year-on-year at 28%; vehicle loans, 54%; Gold Loans, 56%. Retail overall has grown at 36% year-on-year. Overall, stress number stands at 3.35%, within which SMA1 plus 2 is 1.69%, which is an 18 bps improvement. In terms of above INR5 crores, the stress stands at 0.19%. Our gross NPA in terms of percentage has got reduced from 1.72% in the last quarter to 1.60% this quarter.
The net NPA has improved from <strong>0.18%</strong> in the last quarter to 0.15% this quarter. The ROA, ROE and NIM numbers; against the guidance of 3.75%, we have achieved 3.87%. ROA guidance, 1.75%, we have achieved 1.86%. ROE guidance to maintain ROE above 20%, we have actually achieved in this quarter 23.79%. Cost-to-income, we have done 37.19%. Yield on advances stands at 8.95%. Cost of fund stands at 4.10%. Cost of deposits stands at 4.47%. We have been able to clock our highest ever quarterly profit of INR1,779 crores and the 9 months net profit has exceeded INR5,000 crores, which stands at INR5,005 crores. We have a CRAR of 17.06%. CET1 is maintained at 13.10%. GoI holding stands at 73.6%.
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