Bank of Maharashtra Q1 profit surges 27% as bad loans fall
Bank of Maharashtra posted a 27% jump in first-quarter profit as rapid loan growth and improving asset quality underscore the state-owned lender's operational resilience.
Net profit for the quarter ended June 2026 rose to ₹2,020 crore, up from ₹1,593 crore in the corresponding period of the previous year. This growth was underpinned by a 14.53% increase in net interest income, which reached ₹3,770 crore compared to ₹3,292 crore a year earlier. On a sequential basis, net interest income nudged up 1.82%.
Credit expansion served as the primary catalyst for the earnings beat, with net advances surging 27.22% year-on-year to ₹3,01,934 crore. This rapid disbursement drove interest income up to ₹8,037 crore, compared to ₹7,054 crore in the prior year. Even as the loan book scaled at a brisk pace, the lender successfully expanded profitability margins, with return on assets strengthening to 1.90% from 1.80%.
For a state-owned lender, the ability to grow the balance sheet without accumulating bad debt is a notable operational achievement. Gross non-performing assets fell to 1.45% of gross advances from 1.74% a year ago, while net NPAs dropped to just 0.13%. Concurrently, the cost-to-income ratio improved to 35.04% from 37.57%, demonstrating tighter operational control alongside better risk management.
Sustaining this level of credit growth, however, exerted pressure on the bank's capital buffers. The capital adequacy ratio declined to 18.64% at the end of June from 20.06% a year earlier. While this remains well above regulatory requirements, investors will likely focus on management's strategy for capital preservation if loan demand stays elevated.
The equity market welcomed the results, with shares closing 2.87% higher at ₹84.35 after touching an intraday high of ₹87.40. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, said the stock "has staged a strong recovery over the past two sessions after witnessing a sharp correction last week." He added that the "rebound has come from the crucial 89-day Exponential Moving Average (89-DEMA), indicating buying interest at lower levels," with the ₹80 level acting as strong support and potential upside reaching the ₹94 mark.
