Ladies and gentlemen, good day and welcome to Bank of Maharashtra Q4 and FY 2025 earnings conference call. We have with us from the management, Sri Nidhu Saxena, Managing Director and Chief Executive Officer, Sri Asheesh Pandey, Executive Director, Sri Rohit Rishi, Executive Director, and all general managers of the bank. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Sri Nidhu Saxena. Thank you, and over to you, sir.
Thank you, and good afternoon. Thank you for joining this con call, and I'm very happy to share that we have ended yet another financial year very successfully, where we've been able to showcase and maintain a consistent growth across all parameters, whether it is business growth parameters, asset quality, profitability, capital adequacy, efficiency ratios, and so on. I will quickly share with you the highlights of it. The total business has grown by 15.30% year-on-year and has reached INR 547,000 crore . Total deposits increased by 13.44% to INR 307,000 crore . Advances increased at 17.76% to INR 240,000 crore . NPA has declined in the bank to 1.74%. Net NPA also reduced to 0.18%. PCR is maintained at 98.3%. Our operating profit has grown by 14% to INR 2,520 crore for this quarter, and for the full year, it is 16% year-on-year growth.
Net profit has increased by 36%, and it has reached for full year at INR 5,520 crore, again, this challenging environment where some lenders have been experiencing, or at least claiming that they would be seeing some NIM contraction immediately. We have been able to maintain, and rather, NIMs year-on-year were improved eight basis points, and full-year NIM stands at 4% now. Quarter-on-quarter, we have improved our NIM by four basis points, and we are maintaining that high NIM of 4.01% for the Q4 as well. The ROA stands at a healthy 1.75%, which is a 25 basis points increase over the last year. The CET1 capital adequacy is healthy, 16% around. CRAR is healthy, 20.53%. LCR at 127%. Our Government of India holding has been reduced during the last financial year, where we have done a successful capital raise, and the same has been brought down to 79.6%.
My other cost-to-income has come down again, 22 basis points year-on-year, and stands at 38.5%. Yield on advances has improved year-on-year, 16 basis points, stands at 9.3%. Recovery, it has been a good year for the bank in terms of recovery, and we have achieved what the number of recovery that we had planned for the bank. Our rate of recovery performance also has been fairly good. As regards the segment-wise growth, the RAM segment has seen a healthy growth. Within the RAM, Retail grew by 25% year-on-year. Segment-wise, home loan also grew 30%. Our other focus products, car loan, grew by 47%. Gold year-on-year grew by 56%. Corporate advances, too, wherever we are getting good income earning opportunities, we are present there. We are maintaining a RAM corporate ratio of 62/38 for March 2025, and corporate book also grew year-on-year by 15%.
Stress in the loan book has been managed well. We have seen improvement here as well. 129 basis points reduction in the overall stress number of the bank from 4.71% to 3.42% for March 2025. Stress in accounts above INR 50,000,000 have been standing at 0.11%. SMA 1 + 2 is a mere 2%. A lot of strategies were put in place in the beginning of the year, which have actually helped this sustainable growth of business in the bank. We have also seen that the core business coming from the branches, the retail, sustainable portion of business have also grown up in the bank. We have seen that the dependence on pool buyouts and direct assignment transactions also have been kept under control, and wherever for strategic reasons only, we have gone ahead in entering into these transactions.
Despite a degrowth in pool transactions, we have seen our advances overall have grown at 18%, and the satisfactory part of this growth is that the sustainable, the core portion of the business has grown in the bank. Branch opening, we have been one distinct bank to have been opening branches over the last three years. Some 500+ branches have helped the bank to have its presence across the major districts of the country. Going forward, we have approval from the board to open 1,000 branches in five years at the rate of 200-220 in the next 12 months. We are also taking help of an external expert to formulate revised strategy, if so felt, in terms of branch expansion that is going to happen in the bank going forward.
We have also been approved of a GIFT City license for opening an IBU at GIFT City, Gandhinagar, and the project is being taken at a fast pace, and this one enabler will open new opportunities for the bank, which will be only helping us give more benefits to the bank and also our clients who for some of their existing needs were actually going to some other banks to fulfill those. This GIFT City IBU will also ensure our global presence, and this will happen a reality within this financial year. All the IT, HR, and other segment requirements have been assessed. Steps have been taken to see that these are getting available so that the project is seen on track as soon as possible.
While we have grown our business, we have also been very mindful of the assurance function, the governance, the risk managing risk of different natures, including technology risk. Lately, we have been onboarding talents wherever the internal skill sets were not available. We have gone for these domain experts recruitments to strengthen the technology structure, to strengthen the risk and the governance structure in the bank. There is a strong understanding that if the bank is to grow and grow in a sustainable manner, the risk governance and assurance functions need to be strengthened, which have been very consciously done, and we have onboarded a lot of senior-level skill sets in the bank to help support the bank in growth and sustain this growth in times to come. I think I will take a pause here and take your questions.
Maybe some other critical numbers you may like to further ask us or any other questions, they are most welcome. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch panel. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ashok Ajmera from Ajcon Global. Please go ahead.
[Foreign language].
Mr. Ajmera, if you have muted, please unmute your line. Go ahead. Since there is no reply from the line of Mr. Ajmera, we're making an announcement. For questions, please press star and one. Once again, a reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Jai Mundhra, ICICI Securities. Please go ahead.
Yeah, hi sir. Congratulations on a steady and strong numbers. I have a few questions, sir. First, the growth that you mentioned, you also talked about that you have strengthened the assurance function. I wanted to check, sir, of this growth, is this 100% delivered by branches, or you have some type of DSA or loan originator, or this growth is entirely done by the branches itself?
I did mention about it. Let me further elaborate. We have, as I said, 500+ branches, and the new business that is coming into the bank, it is mostly from my existing set of branches, and these new branches which have been identified to be opened in potential growth centers. They are contributing in a significant manner to the bank's business.
The focus in the last full year, in fact, for the last three quarters, the way we are reviewing our zones, the field functionaries, it was amply clear that the bulk components of business are handled by the head office, corporate office centrally, but the zones and the field are ensuring that each of their branches are functioning at their optimum level and getting both the asset and the liability business that is available in the periphery or in the geography of the new branch or the existing branch that is open. With that clear focus given to our field functionaries in the review, the impact, I will share a small data with you which will indicate how the business that has been growing in the bank has been more from the branches, which is the core and the sustainable one.
Taking, for example, our NBFC relationships and the pool buyout and direct assignment transactions. In the previous years, we have been experiencing some year-on-year growth in this contribution coming from the tie-ups with the NBFC, whether through pool or direct assignment transactions. FY 2025 whole year has been the first year where there has been a degrowth in pool buyout transaction by -7%. Despite this, the credit has grown by almost 18% in the bank. That strategy has worked, and the branches have been given a lot of enablers from head office to help them source new business. As regards your question on DSA, we are very, very conscious and considering that what loan book that is going to get created about the quality of it. We are mindful of the quality and the underwriting benchmark standards.
We have, in fact, in the last year, strengthened our underwriting standards and have said that below a point of, say, credit score for an individual segmented borrower, there is no underwriting permitted in the entire bank. While that was a tough call, we had seen that with the right enablers gone from head office, the growth has not gone down. We have grown and maintained the growth, and the growth rate is only improved. The satisfactory part of it is that the growth and the quality of loan growth has been ensured with the stricter underwriting standard. To answer in one line, there are no aggressive DSAs and acquisition strategies. It is my own core branches where we have complete control, and asset quality is of supreme importance.
I don't mind achieving a level of business in, say, one or two more quarters if I take, but definitely there's no compromise on the asset quality at any point of time.
Right. Sir, what is the outstanding of this pool buyout which has declined just to get a sense out of your INR 2.36 lakh crore loan book? How much is the outstanding pool buyout?
Yeah. Amit, you would have those numbers ready with you. Can you share the numbers?
Sir, as of 31st March, pool outstanding is INR 12,998 crore. As it is INR 14,045 crore March 24th.
Okay. Sure. Secondly, sir, on your benchmark, what would be the share of loan links to EBLR, MCLR, fixed rate, and other benchmarks?
From my loan book, 37% portfolio is linked to EBLR, and 57% is what is linked to MCLR. You would see a distinct factor that there have been two rate cuts. I am not operating out of the system. I also would be affected going forward. I'm sure impact is going to be felt by us, but the way we have managed our business mix, and there has not been the full quarter impact for the last rate cut that we have seen. If you see that NIM in our case, actually for the last three quarters, the number was 3.97, 3.98, 3.99, and we have crossed to 4.01 for the Q4. We have always been mindful of not only quality but also the pricing aspect of it.
Top-line growth has been driven in the bank very consciously to see how it is impacting my bottom line. Some of the businesses where we were seeing that there is no contribution to the bottom line, even sometimes due to competition where we are giving some, we are required to give some concessions, are we able to keep that relationship profitable by taking some ancillary business from the same set of borrowers? If those were not happening, some segments we have not taken exposure or exited. For example, we have a board-approved product where at T-bill rate, we could have built some portfolio, but we decided that whatever exposure we had, that T-bill rate product today, as of March 25, the exposure is not there. It is zero.
That's how we have been driving business consciously that not only top line but bottom line, also how each and every ratio is quarter and quarter is maintained in the bank.
Thank you. Mr. Mundhra, please return to the queue for more questions. Next question comes from the line of Ashok Ajmera with Ajcon Global. Please go ahead.
Thank you for giving this opportunity. Compliments to you, Nidhu sir, Asheesh ji, and Rohit ji, and of course, Amit ji, and GM Advance for the fantastic results quarter-after-quarter and year-after-year now for the last two, three years, four years. If you look at the, I mean, on all the parameters, you have performed well. I mean, the CASA, which went down to 49.28% in December, which used to be always above 50%, has again been brought up to 53.28%. In this scenario, having this kind of CASA, I think you are the only bank maybe who is having this. Even on the credit front, and I mean, on all the parameters, sir, the results are fantastic. Compliments to you for that. Having said that, sir, I have just a couple of observations and some questions, sir.
I have seen, sir, we have noticed that the growth at the end of the year is good, whether it is a deposit or advances. The major growth has come in this quarter, that is the January-March quarter. If you look at the advances, of course, it was very small in the first nine months, I think. Anyway, in the deposit also, only 3.5% in nine months and 10% down this quarter only. Similarly, in the credit also. If you look at further breakdown, sir, the savings deposits have gone up only in this quarter itself by 14.78%, and the current account has also gone up by 31%. Whether this kind of growth, which has come only in this January-March quarter, finally, is sustainable, number one.
Number two, is it going to be the pattern for the next year also that you are a little timid down a little in the first and second quarter, and then you pick up in the third and fourth quarter? What is your comments on that? Because it is something which is very, very unusual that in one quarter only you have grown so fast, and whether it is going to be sustained. This is my first question, sir.
Ajmera ji, thank you for your noting the performance in the bank and the consistency in the performance. As regards our feeling regarding the growth happening only or mostly or majorly in the last quarter is not something very unusual in terms that you will see the Q1, Q2, Q3, Q4.
In the entire industry, if you would have looked at the data at the industry level or even at the individual bank level, you will see that the Q4 is the highest performing quarter for any bank for any matter. There have been some macro events we all have known about. Maybe if it's the Maharashtra general elections, Maharashtra state elections, or elections in some states. As we have robust kind of relationships at the government and the institutional business that we are commanding in Maharashtra, in outside Maharashtra, and many states. With these kind of macro events beyond the control, you would have also read that wherever we have relationships, it was a news item that the state had released 500 GRs in the last three days of the financial year.
Out of that 500 GRs, 300 GRs happened on the last day only because that's how the election activity had delayed the disbursement of funds. These kind of events do impact that you will see sometimes more than usual. This is something more than usual. Every year, you will not find elections happening. This is one of kind of an event. Let me tell you, when we are reviewing our branches and zones, as I mentioned earlier, the focus is entirely on the core business that the zone and its set of 60-65 branches are going to generate for the bank. As regards the institutional business, my vertical heads in corporate office, in central office sit and plan for that kind of business. Our focus is 100% on the core, which is a sustainable business, number one.
Our focus is also on the average business because when we are reviewing, the second part critical in our review mechanism, review format of our field, is that what is the average business? It is not the terminal business basis which we are only reviewing and ending. It is the average business. If it is the average, it is advances, the average advances in that quarter, 90 days. Because concept given to the field is very clear. If you are doing business for the last one week or the last terminal date, advance will not lead to have the bottom line contribution. If we are 90 days earning advance only, interest only for seven days or three days, that does not add to my bottom line. If you see that even the bottom line parameters have been correspondingly maintained.
I think it is not true to us that it is majorly only in the last quarter that things are there. If I quote the numbers, my average advance has been growing at the rate of 18%. My average deposit in the bank has been growing at the rate of 14%. If you see the terminal number, the terminal number and the average number is the same. Average advances, we are always excluding the quarter-end numbers when we are calculating this figure. I think, Ajmera ji, that answers your question.
Yes, sir. Yes, sir. Very well answered, sir. Sir, one question is a little observation on the restructuring of the standard advance, which has gone up by, I think, INR 439 crore only in the Corporate book. Can you throw, would you like to throw some light on this that INR 439 crore in the Corporate book, which has gone to the structuring of the standard advance? What is the nature of this? Is it one or two accounts, or is it a multiple number of accounts?
Sankpal and Srivastava, would you like to respond to that?
Two accounts, Ashok ji, it is only DCCO extension. Nothing alarming there. Only because of DCCO extension in two accounts, it's numbered as well.
Two accounts?
Yeah, yeah. Only two accounts.
One is a PSU, and the other one is a state government account. Both are infra projects. Due to land issues, the DCCO got extended.
Okay. Sir, on the capital raise, you got the approval of INR 7,500 crore for the QIP and INR 10,000 crore for the long-term bonds. What is the plan, sir, there at this rate of the stock, which in spite of the good result today has also not yet responded, which I feel would do, would you be comfortable to immediately coming in this quarter, this April-June quarter, for the QIP or a part of it?
Mr. Ajmera, when we begin our financial year, we make our assessment of the capital requirements for the full financial year. This is a process being the beginning year of the board meeting, the first of the board meeting. Along with the results, we move this paper. There is a process that will follow after this. We have to go to shareholders, AGM, and then government and get the approval. Once the approval is done, our process is complete. We will then be taking a call, what mode will be used, and at what time opportune. That call will be taken during the course of the year. One of the motivations with us is that since we are currently at 79.6% of Government of India holding, the SEBI requirement of 75% is not a difficult milestone to be achieved.
Definitely, we will be looking at the right time, right mode, and taking our decision during the year.
Thank you. Mr. Ajmera, please rejoin the queue for more questions. Next question comes from the line of Pinaki Banerjee with AUM Capital Private Limited. Please go ahead. Mr. Banerjee, please go ahead with the question. Mr. Banerjee, if you have muted your line, please unmute the line and go ahead with the question.
Hello. Sir, am I audible?
Yeah, yeah. Go ahead.
Okay. Sir, congrats for the good set of numbers. Sir, just a couple of questions. Sir, regarding your loan portfolio, the maximum exposure is towards the infrastructure sector. Sir, actually, can you segregate on what type of companies this exposure is? Regarding infrastructure, what are the types of companies the loan book is?
Overall, if you see my business mix and the guidance that we had kept for ourselves, was to maintain a RAM corporate share of 60/40 and ± 2%. Along with all other parameters, we have actually achieved or surpassed our guidance that we kept for the full year last year, including this when we closed our year at 62/38. The important part is wherever we are seeing the opportunities emerging, we will definitely participate. Opportunities which are profitable for the bank. Adding to my top end and also my bottom line. In the sectors where we are seeing traction, whether it is road, HAM model, whether it is renewable energy, whether it is LRD. These kind of areas we have been bullish on, and we have been taking our considered calls in participating in new opportunities that are coming.
Amit or Rishi ji, you would like to add if anything in this?
To be very specific, our additional exposure has come mainly in renewables or in HAM sector, these are the main sectors.
Okay. Okay, sir. My last question is, now in the falling interest rate scenarios, actually, you are expecting a fall in your NIMs, net interest margins. Actually, on a conservative basis, how much are you expecting to report from current 4%?
If you see that my entire last year, we have been indicating our guidance for NIM. Quarter-on-quarter, we have been performing beyond. Against my NIM guidance of around 3.75-3.85, we have closed the full year with 4, and the Q4 at 4.01. While I have outperformed my guidance, I am mindful that there have been two rate cuts. My 37% of loan book is priced to repo interest rate loans, where I have to pass on the benefit immediately. During the year, yes, we had occasions where we had reviewed our MCLR. Around 30 basis points of MCLR was increased in various buckets during the year. Repricing in some of those assets is also happening now, still one or two more quarters to have that reset date reaching for those accounts.
Yes, going forward, the accommodative stance given by RBI, I am not operating out of the system. We are again going to keep a conservative guidance for NIM for the next year at 3.75. If we see aggressive rate cuts, maybe like other banks, we may be also taking a conscious call to review the guidance. As of now, after achieving 4 and maintaining this level of 3.95-4 for the past four quarters, 3.75 around is the guidance I'm keeping for myself for the next year.
Okay, sir. Okay, sir. That's all from my end. Thanks and all the best for the future.
Thank you.
Thank you. Next question comes from the line of Darshil Jhaveri with Crown Capital. Please go ahead.
Hello. Good evening, sir. Thank you so much for taking my question, sir. I'm sorry I was disconnected in the line. Some questions of mine might be feeling repetitive, sir. Just when we talked about NIMs right now, any kind of guidance you want to give on what our advances and deposit growth would be?
Yes, sure. The guidance for advances, we are keeping at around 17%. For deposits, we are keeping around 14%. When we talk of deposits, our focus always comes to the low-cost part of it. CASA will be maintained above 50%. That is the conservative numbers, the conservative guidance I have kept for myself. We will try to keep performing beyond that. Those will be the efforts. This is the guidance for the numbers you asked.
Sir, any sort of guidance on ROA, GNPA, credit cost? That would be really helpful, sir.
Yes, sir. Sure. ROA, we have achieved 1.75 for the full year. My guidance for ROA is 1.75. We would like to maintain for the next year. GNPA has again seen a reduction, has come down to 1.74%, but guidance is to maintain it below 2% and credit cost to maintain below 1%.
Okay. Okay. Fair enough, sir. Sir, now I just wanted to know with our expansion in branches that we are planning, how do we see cost to income going forward? Like, we said we are hiring also a bit more talent. Any sort of what do we see in the OpEx side for us?
Mr. Jhaveri, if you see the cost to income that we currently had closed our financial year, it is 38.5%, which is again, when we compare and look at peers and other banks in the industry, including the private banks, we are best in the industry in this parameter along with some other 20 parameters that we are every quarter comparing ourselves with. My cost to income has gone down by 22 basis points year-on-year. Yes, with the new branch opening, this OpEx is bound to increase. What I have seen is that with the new incremental business revenues that we are generating, we are able to also find some traction in the income contributing element of it. Cost to income, despite my aggressive branch opening of 500 branches in the last three years, we have not allowed it to go up.
The incremental revenue is actually helping us to sustain the cost to income within limits. The guidance again for cost to income is to maintain it below 40%. Currently, I am at 38.5%, which is again to maintain below 40% and is among the best in the industry, is what I perceive it as.
Fair enough, sir. That's great. Just last question on my end, sir. On the ground, how are we seeing the demand right now? I think people are expecting a good monsoon, and there's been a tax cut by the government. Are the sentiment good on the ground? How is it going? What's the report that you are seeing? I know you're guiding for a good growth, but how do we see the economy panning out? Is there a possibility of some stress coming, or just how do we see in general?
I think India growth story, and despite tariff concerns coming lately, and we are seeing that world markets getting impacted in a particular way, also we keep listening that maybe in the long run, all these disruptions may benefit India in the long run. Definitely, whether some of the entities have changed the growth estimates for the country, but still, there is no iota of doubt that country remains as to be one of the fastest growing emerging economies. With the economy in the country growing, we are directly linked. Banks are directly linked. I don't see any major challenge as such. Yes, there are disruptions that are happening, but there are a lot of data points around how the GST collections have surged in the country year-on-year. It has grown 9.9%.
For the month of March 2025, the GST collections is INR 1.96 lakh crore. All these data points also indicate that the growth is very much there. It is happening. We are also continuously engaged in analyzing which sectors to grow, where the opportunities are coming, and how to see that we are present there. One as a strategy we have, when we target new sectors, high-quality borrowers, there is a realization that our turnaround time in deciding on the proposals that will come in the corporate credit sector makes some difference, brings some value. We are very conscious, being a lean, mid-sized bank, we are able to move on high-quality, high-rated customers. With our improved tech, not only are we successfully able to onboard, but command a better pricing also through our good and fast service to them.
Sir, that's great to know, sir. Thank you so much, sir. All the best, sir.
Thank you. Reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Ashok Ajmera with Ajcon Global. Please go ahead.
Oh, that's great. Thank you for giving the opportunity again. Sir, just a few couple of remaining observations and some questions. Sir, one very, I mean, there is one in auditor's emphasis, note number four. It says that because of the inadequacy of the independent directors, number of the independent directors, some regulation was invoked, and the results have been taken directly to the board. Since when this situation is there, sir, when you don't have the full strength of the independent directors, and what is happening on this?
The independent directors, this is not anything unique to us. Since government is engaged in providing independent directors to all the PSU entities, whether it is insurance, whether it is the entire BFSI space, this is impacted. Since December, actually two of our independent directors, we are awaiting their whatever is the outcome. I will not like to comment on that part. This is again, as I said, not unique to the bank. We have definitely not allowed any business in any way to hamper. This is a transition phase. Nothing of any serious concern or any, I should say, matter of discussion also.
No, sir. Anyway, certain things are there in place. They are just to check that.
Sir, before you shoot your next question, may I request you? You mentioned that despite the results, stock has not seen any upsurge. I may request you to write the positive reviews and request you and all others. Market will get notice. That is what my request will be.
Sir, sure, sure. 100%. The way, I mean, you do not have to tell that. I mean, your numbers speak about that. I mean, I can add that your profit would have been higher by INR 348 crore, and there would not have been any change by RBI in the classification and valuation of the investment. That is another reserve which is already being built up. It has gone to the AFS reserve, INR 348 crore, which otherwise would have come to P&L. There is one plus point. Another plus point about which I am talking about, and I ask you, sir, you have continuously maintained a COVID provision of INR 1,200 crore, a buffer. How long do you plan to keep it?
Especially in this quarter and the year ending, when you had to provide a little more for NPA, almost about INR 47 crore, INR 48 crore, or INR 50 crore more provision, and overall provision is as compared to the last quarter of INR 840 crore, it is INR 983 crore. Could you not have used at least some portion of that reserve and would have given further decent profit, which directly impacts this stock?
Sure, sir. Ajmera ji, I will give you, want to answer you that investment gave us gain. Deliberately, we have not reckoned. We were having that gain. Since we were expecting that RBI will come with the cut, and it has happened, we were expecting that there will be good profit further appreciation. At that time, we can anchor that. You can see, though we got the benefit in capital, you know that AFS reserve again, it will be part of capital. At the opportune time, we will convert into the trading profit. However, having said that, it is the strengthening of yield also.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Sri Nidhu Saxena for closing comments.
Yes, I have nothing more to add. I think broadly it is all covered. Most of my performance, the highlight would be that it is consistent for more than three years now. Quarter-on-quarter, you would not have seen spike in any of the parameters which should give any kind of discomfort to investors. We have maintained and maintained consistently quarter-on-quarter improvement only. The only one last, given this opportunity, we have also in today's board recommended a dividend of 15%, which of course proposal has to be approved by the AGM. That is the one more addition I would like to share in the conference. Thank you.
Thank you. On behalf of Bank of Maharashtra, that concludes this conference. Thank you for joining us. You may now disconnect your lines.