MAHABANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | MAHABANK | Market Cap | 61,555 Cr. | Current Price | 80.1 ₹ | High / Low | 85.9 ₹ |
| Stock P/E | 8.77 | Book Value | 43.0 ₹ | Dividend Yield | 1.87 % | ROCE | 6.03 % |
| ROE | 22.8 % | Face Value | 10.0 ₹ | DMA 50 | 74.7 ₹ | DMA 200 | 65.2 ₹ |
| Chg in FII Hold | 0.63 % | Chg in DII Hold | 0.43 % | PAT Qtr | 2,014 Cr. | PAT Prev Qtr | 1,779 Cr. |
| RSI | 57.0 | MACD | 1.54 | Volume | 1,39,65,688 | Avg Vol 1Wk | 1,12,90,238 |
| Low price | 50.3 ₹ | High price | 85.9 ₹ | PEG Ratio | 0.22 | Debt to equity | 11.6 |
| 52w Index | 83.5 % | Qtr Profit Var | 34.9 % | EPS | 9.13 ₹ | Industry PE | 7.81 |
📊 Financial Overview: Bank of Maharashtra (MAHABANK) shows improving fundamentals with ROCE at 6.03% and ROE at 22.8%, reflecting strong shareholder returns despite modest efficiency. Debt-to-equity at 11.6 indicates high leverage, typical for banks. Quarterly profit rose from ₹1,779 Cr. to ₹2,014 Cr. (+34.9%), highlighting solid earnings momentum. Cash flows remain stable, supported by lending operations.
💹 Valuation Indicators: The stock trades at a P/E of 8.77 compared to the industry average of 7.81, suggesting slight overvaluation. With a book value of ₹43, the P/B ratio is ~1.86, which is reasonable. PEG ratio of 0.22 indicates strong growth potential relative to valuation. Intrinsic value appears higher than the current market price of ₹80.1, making it attractive for entry.
🏢 Business Model & Competitive Advantage: Bank of Maharashtra operates as a public sector bank with strong regional presence and government backing. Its competitive advantage lies in scale, retail lending, and digital adoption. Overall health is stable, with profitability improving and valuations remaining attractive.
📈 Entry Zone & Long-Term Guidance: Current price ₹80.1 is near fair value but still attractive. A good entry zone would be ₹75–₹80, aligning with DMA support. Long-term holding is favorable given strong ROE, government support, and improving profitability.
Positive
- ✅ ROE at 22.8% shows strong shareholder returns.
- ✅ Quarterly profit growth (+34.9%) highlights earnings momentum.
- ✅ FII holding increased by 0.63% and DII holding by 0.43%, showing institutional confidence.
Limitation
- ⚠️ ROCE (6.03%) indicates modest efficiency.
- ⚠️ Debt-to-equity at 11.6 reflects high leverage.
- ⚠️ Dividend yield (1.87%) is moderate compared to profitability.
Company Negative News
- 📉 High leverage remains a structural risk for the bank.
- 📉 Valuation slightly above industry average P/E (8.77 vs 7.81).
Company Positive News
- 📈 RSI at 57.0 indicates neutral-to-positive momentum.
- 📈 MACD at 1.54 highlights short-term bullish momentum.
Industry
- 🏭 Banking industry P/E at 7.81, slightly lower than Bank of Maharashtra’s valuation.
- 🏭 Sector growth driven by retail lending, financial inclusion, and digital transformation.
Conclusion
🔎 Bank of Maharashtra is financially stable with strong ROE, improving profitability, and government backing. Entry should be considered near ₹75–₹80. Long-term holding is favorable given attractive valuations and consistent earnings growth, though leverage and efficiency ratios should be monitored.
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