Quality Assessment: Sustained Financial Strength and Lending Discipline
The bank’s quality metrics have remained robust, with a Gross Non-Performing Assets (NPA) ratio of just 1.60%, signalling disciplined lending practices and effective asset quality management. This low NPA ratio is a critical factor in the upgrade, as it demonstrates the bank’s ability to manage credit risk effectively in a challenging macroeconomic environment.
Bank of Maharashtra has also maintained a strong credit-deposit ratio of 83.79% in the half-year period, indicating efficient utilisation of deposits for lending activities. The bank’s operating profit grew by 6.27% in the latest quarter, marking the 21st consecutive quarter of positive results, which underscores consistent operational performance and resilience.
Long-term fundamentals are equally impressive, with net profits growing at a compound annual growth rate (CAGR) of 71.13%, and net interest income (excluding other income) expanding at an annual rate of 21.57%. These figures highlight the bank’s ability to generate sustainable earnings growth, a key quality parameter that supports the Strong Buy rating.
Valuation: Attractive Pricing with Strong Return Metrics
Bank of Maharashtra’s valuation remains compelling, trading at a price-to-book value of 1.5, which is at a discount relative to its peers’ historical averages. This attractive valuation is complemented by a return on assets (ROA) of 1.7%, reflecting efficient asset utilisation and profitability.
The stock’s price-earnings-to-growth (PEG) ratio stands at a low 0.3, signalling undervaluation relative to its earnings growth potential. Additionally, the bank offers a high dividend yield of 3.8%, providing income-oriented investors with an appealing return component alongside capital appreciation prospects.
Over the past year, the stock has delivered a total return of 28.41%, significantly outperforming the Sensex’s 7.07% return over the same period. This market-beating performance, combined with favourable valuation metrics, has been a decisive factor in the upgrade to Strong Buy.
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Financial Trend: Strong Quarterly and Long-Term Growth Trajectory
The bank’s recent quarterly results for Q3 FY25-26 were very positive, with interest earned reaching a record ₹7,344.20 crores and profit after tax (PAT) hitting ₹1,779.33 crores, the highest in its history. These figures reflect strong core banking operations and effective cost management.
Net interest income and net profit have shown sustained growth, with the latter increasing at a CAGR of 71.13% over the long term. The bank’s operating profit growth of 6.27% in the latest quarter further confirms the positive financial trend. This consistent performance over 21 consecutive quarters has reinforced investor confidence and contributed to the upgrade.
Institutional investor participation has also increased, with a 5.02% rise in stakeholding over the previous quarter, now accounting for 17.42% of total shareholding. This growing institutional interest reflects confidence in the bank’s financial trajectory and governance standards.
Technical Outlook: Bullish Momentum Across Multiple Indicators
The technical grade of Bank of Maharashtra has been upgraded from mildly bullish to bullish, driven by strong signals across key technical indicators. The Moving Average Convergence Divergence (MACD) is bullish on both weekly and monthly charts, while Bollinger Bands also indicate bullish momentum on these timeframes.
Daily moving averages are firmly bullish, supporting the positive price trend. The Know Sure Thing (KST) indicator is bullish on a weekly basis, though mildly bearish monthly, suggesting some caution in the longer term but overall positive momentum.
Other technical signals such as the Dow Theory show mildly bullish trends on both weekly and monthly charts. While the On-Balance Volume (OBV) is mildly bearish weekly and neutral monthly, the overall technical picture remains positive, justifying the upgrade in technical grade.
Currently, the stock trades at ₹65.50, close to its 52-week high of ₹67.77, with a day’s trading range between ₹64.68 and ₹65.85. The stock’s recent price appreciation of 0.78% on the day of the upgrade announcement further underscores the market’s positive sentiment.
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Comparative Performance: Outperforming Benchmarks Over Multiple Timeframes
Bank of Maharashtra has demonstrated market-beating returns over various periods. Its one-year return of 28.41% significantly outpaces the Sensex’s 7.07% gain. Over three years, the stock has surged 129.02%, compared to the Sensex’s 38.13%, and over five years, it has delivered an impressive 304.82% return versus the Sensex’s 64.75%.
Even on a shorter-term basis, the stock has outperformed the benchmark, with a 1-month return of 1.66% against the Sensex’s negative 1.74%, and a year-to-date return of 5.56% compared to the Sensex’s decline of 1.92%. These figures highlight the stock’s resilience and growth potential relative to the broader market.
Despite the strong returns, the stock remains attractively valued, offering investors a compelling risk-reward profile supported by solid fundamentals and positive technical momentum.
MarketsMojo Ranking and Industry Position
Bank of Maharashtra is rated among the top 1% of all 4,000 stocks covered by MarketsMojo, reflecting its superior quality and growth prospects. It holds a Mojo Score of 87.0 and a Mojo Grade of Strong Buy, upgraded from Buy on 06 Feb 2026. Within the mid-cap universe, it ranks second, and it is fourth across the entire market, underscoring its strong standing among peers.
The bank operates in the Public Sector Bank industry and sector, where it has consistently demonstrated leadership through prudent management and robust financial performance.
Conclusion: A Compelling Investment Opportunity
The upgrade of Bank of Maharashtra to a Strong Buy rating is well justified by its strong quality metrics, attractive valuation, positive financial trends, and bullish technical outlook. The bank’s consistent profitability, low asset quality risks, and growing institutional interest provide a solid foundation for future growth.
Investors seeking exposure to a fundamentally sound and technically strong public sector bank would find Bank of Maharashtra an appealing addition to their portfolio, especially given its market-beating returns and undervalued price metrics.
With a current price near its 52-week high and a strong dividend yield, the stock offers both capital appreciation and income potential, making it a well-rounded investment choice in the banking sector.
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