BANK OF MAHARASHTRA 2023-24 Annual Report Analysis

Thu, 23 May

BANK OF MAHARASHTRA has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

BANK OF MAHARASHTRA Income Statement Analysis

• Interest income during the year rose 28.9% on a year-on-year (YoY) basis.
• Interest expenses were up by 30.8% YoY during the same period.
• Operating expenses increased by 22.8% YoY during the year.
• The bank's net interest income (NII) increased by 26.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.7% in FY24 as against 3.2% in FY23.
• Other income increased by 31.5% YoY during the year.
• Net profit for the year increased by 56.3% YoY.
• Net profit margins during the year increased to 19.9% in FY24 from 16.4% in FY23.

BANK OF MAHARASHTRA Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	158,986	204,948	28.9%
Other Income	Rs m	22,809	29,986	31.5%
Interest Expense	Rs m	81,568	106,718	30.8%
Net Interest Income	Rs m	77,418	98,230	26.9%
Operating Expense	Rs m	39,225	48,152	22.8%
Pre-provision Operating Profit	Rs m	61,003	80,064	31.2%
Provisions & Contingencies	Rs m	34,975	39,506	13.0%
Profit before tax	Rs m	34,456	43,603	26.5%
Tax	Rs m	8,429	3,044	-63.9%
Profit after tax	Rs m	26,050	40,718	56.3%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	3.2	3.7
Net profit margin	%	16.4	19.9

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BANK OF MAHARASHTRA Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 2,707.3 bn as compared to Rs 2,340.6 bn in FY23, thereby witnessing an increase of 15.7%.
• Advances for the year stood at Rs 2,002.4 bn as compared to Rs 1,712.2 bn during FY23, a rise of 16.9%.
• Cost of deposits for BANK OF MAHARASHTRA rose 20.8% and stood at 3.7%, while yield on advances rose to 7.9%.
• The lender's investments fell to Rs 684.6 bn during the year from Rs 690.4 bn in FY23.
• Borrowing stood at Rs 77.2 bn, a fall of 28.3% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 3,073.3 bn as against Rs 2,678.3 bn during FY23, thereby witnessing a rise of 14.7%.

BANK OF MAHARASHTRA Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	157,902	198,706	25.8%
Advances	Rs m	1,712,207	2,002,399	16.9%
Deposits	Rs m	2,340,641	2,707,264	15.7%
Yield on advances	%	6.7	7.9
Cost of Deposits	%	3.1	3.7
Investments	Rs m	690,420	684,647	-0.8%
Borrowings	Rs m	107,657	77,189	-28.3%
Total Assets	Rs m	2,678,272	3,073,290	14.7%

Current Valuations for BANK OF MAHARASHTRA

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 5.7, an improvement from the EPS of Rs 3.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 69.8, stands at 8.2 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.5 times, while the price to income ratio stands at 1.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	23.6	28.9
Earnings per share (Unadj.)	Rs	3.9	5.7
Diluted earnings per share	Rs	3.7	5.7
Avg P/E ratio	Rs	6.6	8.2
Avg P/ABV ratio	Rs	1.3	2.5
Avg Market Cap	Rs	172,469	335,338
Dividends per share (Unadj.)	Rs	1.30	1.40

Ratio Analysis for BANK OF MAHARASHTRA

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 74.0x during FY24, from 73.2x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 14.01x during FY24, from 15.51x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): BANK OF MAHARASHTRA's capital adequacy ratio (CAR) was at 17.4% as on 31 March 2024 as compared to 18.1% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 20.5% during FY24, from 16.5% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.32% during FY24, from 0.97% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 18.44% during FY24, from 18.26% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. BANK OF MAHARASHTRA's gross NPA ratio stood at 1.9% as of 31 March 2024 compared to 2.5% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of BANK OF MAHARASHTRA was 0.2% in financial year 2024. This compared with 0.3% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	73.2	74.0
Debt to Equity Ratio	x	15.5	14.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	18.1	17.4
Return on Equity	%	16.5	20.5
Return on Assets	%	1.0	1.3
Return on Capital Employed	%	18.3	18.4
% of Gross NPAs	%	2.5	1.9
% of Net NPAs	%	0.3	0.2
Yield on Advances	x	6.7	7.9
Yield on Investments	x	6.3	6.8

To see how BANK OF MAHARASHTRA has performed over the last 5 years, please visit here.

BANK OF MAHARASHTRA Share Price Performance

Over the last one year, BANK OF MAHARASHTRA share price has moved up from Rs 30.1 to Rs 69.8, registering a gain of Rs 39.7 or around 132.2%.

Meanwhile, the S&P BSE BANKEX is trading at 55,086.7 (up 0.8%). Over the last one year it has moved up from 49,821.3 to 55,086.7, registering a gain of 5,265.4 points (up 10.6%).

Overall, the S&P BSE SENSEX is up 20.2% over the year.

(To know more, you can check out historical annual results for BANK OF MAHARASHTRA here and quarterly results for BANK OF MAHARASHTRA here)