Bank of Maharashtra FY27 guidance: 18% loan growth

Stock hits a fresh 52-week high after Q4

Bank of Maharashtra (BoM) shares moved to a fresh 52-week high after the public sector lender reported a strong Q4 performance and reiterated a detailed operating plan for FY27. In market updates around the result, the stock was reported at new highs in the ₹79-₹80.43 zone, alongside an early-session rise of 4.36% to ₹78.83 on NSE and an intraday high of ₹79.20. The immediate trigger was a combination of stronger profitability, higher net interest income (NII), and improved asset quality.

The management commentary also mattered. BoM communicated that FY27 will prioritise deposit mobilisation, branch-led sourcing, and measured asset expansion, with an explicit aim of maintaining a healthier balance between credit and deposit growth. Even though the bank exceeded several FY26 targets, its FY27 guidance was not raised, which some market participants interpreted as conservative relative to the latest performance.

What stood out in the Q4 and FY26 performance

The bank’s Q4 update highlighted a 35% year-on-year jump in profit and a 19% rise in net interest income. The focus on asset quality was also visible, with commentary pointing to better metrics during the period.

For FY26, the bank disclosed that it achieved total business growth of 17%, advances growth of 22%, and deposits growth of 14%. CASA grew 12% and the CASA ratio stood at 52.51%. On margins and profitability, BoM reported a net interest margin (NIM) of 3.91% against an earlier guidance of 3.75%, and return on assets (ROA) of 1.86% against a guidance of 1.75%.

In asset quality, the bank cited gross NPA (GNPA) at 1.45%, improving by 29 bps, and net NPA (NNPA) at 0.13%, improving by 5 bps. These numbers provided the base for BoM’s repeated message that growth will not come at the expense of underwriting quality.

FY27 growth guidance: business, loans, deposits

BoM’s FY27 guidance centres on steady, double-digit expansion with tighter control on the credit-deposit gap. Management expects total business growth of 16% to 17% in FY27. Within that, advances are guided to grow 18%, while deposits are guided at 14% to 15%.

The bank also indicated that FY26 saw credit growth exceed deposit growth because lending activity was strong. For FY27, it expects that divergence to narrow, in line with the 18% advances growth and 14% to 15% deposits growth plan. In multiple references, the strategy is framed as sustainable growth rather than more aggressive balance sheet expansion.

A brokerage note mentioned an expectation that the bank could maintain a loan growth CAGR of around 18% over the medium term, aligning with the headline FY27 advances guidance.

Deposit strategy: institutional flows and branch-led sourcing

A key change in emphasis is on deposit mobilisation. BoM is set to prioritise the mobilisation of institutional deposits, alongside growth driven through branches. The intent is to strengthen deposit traction to support loan growth without stretching liquidity.

Management also flagged deposit and fee income as strategic focus areas for FY27. The guidance narrative positions deposits not just as a funding requirement but as a balance sheet constraint that will shape how fast the bank can expand assets.

Branch-led sourcing was highlighted as central to the plan. BoM also described branch expansion as a long-term growth driver, indicating that distribution remains a core lever for both liabilities and lending.

Profitability targets: NIM, NII, ROA and ROE

BoM guided for a stable NIM of 3.75% in FY27. In one market read-through, this was noted as lower than the then-current run-rate, but still presented as consistent with “healthy profitability”.

The bank guided for NII growth of 15% in FY27. On returns, management indicated an ROA of 1.8% and an ROE of 20% or more. These metrics sit alongside its broader message of disciplined expansion, where profitability targets are presented as non-negotiable guardrails.

On operating efficiency, BoM guided for a cost-to-income ratio below 40%. In the context of current performance, the cost-to-income ratio cited was 36.51%, supporting the FY27 efficiency goal.

Asset quality guardrails and capital headroom

The FY27 credit-risk guidance remained tight. BoM expects GNPA to stay within 2%. For NNPA, the guidance was stated in the 0.2% to 0.25% band across the updates. The bank also guided for slippages below 1% and credit cost around 1%.

It guided for a provision coverage ratio (PCR) of 98%, pointing to a high level of risk buffers. On capital, BoM guided for a Capital to Risk-weighted Assets Ratio (CRAR) of 18%, which it positioned as adequate headroom for the planned 18% advances growth.

Mix shift and segment priorities: RAM focus and MSME moderation

BoM guided for 18% growth in the RAM segments - Retail, Agriculture and MSME. It also plans to maintain a roughly 60:40 mix between RAM and corporate lending, with a plus or minus 2% variation. The stated approach signals continued preference for a granular loan book while retaining corporate exposure within a defined range.

On MSMEs, management commentary referenced moderation as a conscious, quality-led decision. At the same time, the broader credit environment for MSMEs was described as supportive, with BoM projecting an 18% to 20% increase in credit demand from MSMEs with support from the ECLGS.

Why the FY27 guidance looks conservative versus FY26

The bank described FY27 as a continuation of FY26 guidance. It also acknowledged that while it performed better than its FY26 guidance, it did not raise the FY27 guidance numbers. That combination shaped market debate: the targets are detailed and broad-based, but the growth rates are not “stepped up” from the FY26 outcome in every line item.

In practical terms, the guidance implies a conscious effort to align funding and lending: deposits at 14% to 15% and advances at 18%. The bank’s stated objective is to keep growth profitable and improve balance sheet resilience rather than maximising near-term expansion.

Key metrics at a glance

Market impact: what investors are tracking now

The stock reaction suggests investors are placing weight on three inputs: sustained loan growth, tighter asset quality outcomes, and clarity on funding. The bank’s explicit plan to push institutional deposits and branch-led sourcing addresses the most visible FY26 issue highlighted in the commentary - credit growth running ahead of deposit growth.

At the same time, the market is likely to monitor whether a 3.75% NIM can be held while delivering 15% NII growth and 18% advances growth. The FY27 guardrails on slippages, credit cost, and NPAs also put a measurable framework around the “quality-first” stance.

Conclusion

Bank of Maharashtra’s FY27 guidance sets out a measured expansion plan: 16% to 17% total business growth, 18% advances growth, and 14% to 15% deposits growth, supported by a deposit-focused strategy and branch-led sourcing. Profitability and risk targets - including NIM at 3.75%, ROA at 1.8%, GNPA within 2%, and CRAR at 18% - position FY27 as a continuation of disciplined execution rather than a higher-risk growth push. The next market checkpoints will be how quickly deposits respond to the stated institutional and branch strategy, and whether asset quality stays within the tight ranges the bank has laid out.