Is Bank of Maharashtra a good PSU bank stock to buy? YES Securities answers

Bank of Maharashtra share price today

 

Shares of Bank of Maharashtra (BoM) were outperforming the decline seen in the Nifty PSU Bank index on the National Stock Exchange (NSE) today, after domestic brokerage YES Securities issued a bullish report on the lender, lauding its solid financials.

 

In its banking sector report, YES Securities said that a detailed analysis of top eight public sector banks (PSBs) reveal that Bank of Maharashtra has the "healthiest" financial metrics.

 

On the bourses, Bank of Maharashtra share price fell around 1 per cent on the NSE as against a 3.2 per cent dip in the Nifty PSU Bank index in the intraday trade.

 

 

The index, which witnessed heavy selling pressure on Wednesday, December 3, amid profit booking by investors saw all the 12 index constituents nursing losses.

 

At 12:35 PM, the Nifty PSU Bank index was down 3 per cent as against a 0.4 per cent dip in the benchmark Nifty50 index.  CATCH STOCK MARKET UPDATES TODAY LIVE

YES Securities on Bank of Maharashtra

YES Securities Institutional Equities compared eight PSU banks on key financial metrics, including margins, loan mix, and asset quality.

 

The analysis by YES Securities showed that Bank of Maharashtra (BoM) commanded the healthiest net interest margin (NIM) among the eight peers, driven by healthy loan mix and high current account-savings account (CASA) ratio.

NIM, loan mix, and CASA ratio

According to YES Securities, BoM registered a whole bank NIM of 3.9 per cent in the September 2025 quarter (Q2FY26) compared with 2.4-3.3 per cent for PSU bank peers. 

 

Besides, BoM's yield on advances was the highest at 9.2 per cent, aided by low share of corporate loans (38 per cent) of total loan book, which was the lowest in the comparison universe.

 

By comparison, other PSU banks had yield on advances in the range of 7.8-8.3 per cent.

 

BoM's cost of deposits was also the lowest in the analytical universe, at 4.7 per cent, compared with 4.9-5.7 per cent for others.

 

The low cost of deposits was aided by Bank of Maharashtra's healthy CASA ratio, which at 50.4 per cent was the highest in our comparison universe, YES Securities said.  ALSO READ | Nifty IT index up 1% in trade as rupee hits 90-mark against US dollar

Three-year loan growth CAGR

Bank of Maharashtra reported a three-year loan growth CAGR (FY22-25) of 21.6 per cent, compared with 13.0-15.9 per cent for other PSU bank peers. The lender also has the highest loan growth of 17 per cent Y-o-Y as of Q2FY26 compared with 5.6-15.9 per cent for other PSU bank peers. 

 

BoM's loan-to-deposit ratio (LDR) is at 80.8 per cent, which was the third highest in the brokerage's comparison universe. However, in absolute terms, BoM's loan book base is small at ₹2.5 trillion.

 

The brokerage noted that Bank of Maharashtra's asset quality is largely under control with healthy provision levels. The lender's annualised slippage ratio stood at 1.1 per cent at the end of FY25, largely under control. 

 

This is, somewhere, in the middle of the slippage ratio range of other PSU bank peers (0.5-1.6 per cent).

 

That apart, BoM has the highest provision coverage ratio (PCR) of 98.3 per cent.

Solid capital buffer

Bank of Maharashtra's CET-1 ratio stood at 14.1 per cent, as of Q2FY26, which was the third highest in the brokerage's comparison universe. 

 

Further, as per YES Securities, the bank's Tier 1 ratio is the third highest at 15.0 per cent, and its Total Capital Ratio / CRAR is the highest at 18.1 per cent.  ALSO READ | Here's why Angel One share price declined 6% in trade on December 3

Is Bank of Maharashtra a good stock to buy?

Despite the financials, YES Securities said it prefers Bank of Baroda (BoB) stock among PSU banks. It has a 'Buy' rating on BoB with a target price of ₹400 -- 33 per cent upside.

 

YES Securities values the stock at 0.7x FY27E price-to-book (P/B) valuation multiple.

 

That apart, it has a 'Buy' rating on State Bank of India (SBI) (Target: ₹1,225 – 26 per cent upside; valuation: 0.9x FY27E P/B), and Indian Bank (target: ₹1,075 – 22 per cent upside; valuation: 1.2x FY27E P/B).

 

Notably, Bank of Maharashtra is not under the brokerage's coverage. As per Bloomberg's estimates, BoM trades at 1.1x FY27E P/B for RoE profile of 20.1 per cent for FY25, 20.2 per cent for FY26E, and 18.2 per cent for FY27E.