This PSU bank may deliver big upside despite market sell-off — here’s why analysts prefer the stock

Bank of Maharashtra Share Price: Shares of Bank of Maharashtra (BoM) outperformed a sharply weak Nifty PSU Bank index on Wednesday after domestic brokerage YES Securities released a positive assessment of the state-run lender’s financial metrics. The broader PSU banking gauge slipped 3 per cent in midday trade amid profit-taking across constituents, while BoM fell a milder 1 per cent on the National Stock Exchange (NSE).

Brokerage study flags strong NIM, CASA and superior loan mix

YES Securities’ institutional research team compared eight public sector banks on parameters such as net interest margins (NIMs), loan composition, cost of deposits, asset quality and growth trends.

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Its analysis showed that Bank of Maharashtra posted the healthiest NIM in the peer group, supported by a strong loan mix and the highest current account–savings account (CASA) ratio among its comparables. The lender’s CASA stood at 50.4 per cent, significantly above peers, helping it maintain low-cost liabilities.

BoM also reported the highest yield on advances at 9.2 per cent, aided by its relatively low share of corporate loans — around 38 per cent of the total book — which is the lowest in the comparison universe.

Loan growth momentum outpaces peers

The bank’s three-year loan growth CAGR (FY22–25) stood at 21.6 per cent, comfortably ahead of the 13–15.9 per cent range seen among PSU rivals. As of Q2FY26, BoM’s year-on-year loan growth was also the strongest at 17 per cent, compared with 5.6–15.9 per cent reported by other state-owned lenders.

BoM’s loan-to-deposit ratio of 80.8 per cent was the third highest within the sample set, though analysts noted that the lender’s absolute loan book remains modest at Rs 2.5 trillion.

Asset quality steady, cost of deposits among lowest

YES Securities highlighted that the lender’s asset quality remains “largely under control,” with annualised slippages at just 1.1 per cent at the end of FY25. BoM also maintained the lowest cost of deposits at 4.7 per cent, versus the 4.9–5.7 per cent range recorded by other PSU banks.

While the brokerage does not officially cover Bank of Maharashtra, it valued PSU peers SBI and Indian Bank at attractive price-to-book multiples and maintained ‘Buy’ calls on both. Bloomberg consensus data shows BoM trading at 1.1x FY27E P/B, supported by an estimated return on equity (RoE) of 20.1 per cent for FY25, rising slightly to 20.2 per cent in FY26E and moderating to 18.2 per cent in FY27E.