Bank of Maha (MAHABANK)

FairStock Score: 73/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 1/1

Key Financials

Strengths

• ROE of 22.55% and profit growth of 22.87% with sales growth of 19.31% show strong compounding.
• Piotroski F-Score of 8/9 indicates robust fundamental health across profitability, leverage, and efficiency.
• P/E of 8.88 and Graham Number of ₹87.75 versus the price of ₹77.30 provide a moderate valuation cushion.
• Latest quarter net profit of ₹1,799 Cr on sales of ₹7,344 Cr reflects a strong profit margin.
• Promoter holding of 73.60% gives government ownership stability.

Concerns

• P/B of 2.07 is high compared to book value of ₹37.32; a PSU bank at twice book may already price in improvement.
• Free cash flow of ₹-11,842 Cr suggests heavy capital requirements from loan growth, which could pressure dividends or cause dilution.
• Altman Z-Score of 0.41 and EV/EBITDA of 1578.70 are poor under conventional safety metrics, reminding me to rely on bank-specific credit measures.
• ROCE of 5.72% against ROE of 22.55% highlights high leverage (D/E 11.53), leaving earnings sensitive to asset quality shocks.

AI Analysis

Let me start by ignoring EV/EBITDA and Altman Z; those are industrial yardsticks, not useful for a bank. Bank of Maha is a leveraged financial institution, and the right lens is book value, return on equity, and credit discipline. On that basis, the numbers are impressive: ROE of 22.55%, sales growth of 19.31%, and profit growth of 22.87%. The Piotroski score of 8/9 tells me the company's fundamentals have strengthened across profitability, leverage, and efficiency. The latest quarter shows sales of ₹7,344 Cr and net profit of ₹1,799 Cr, a healthy margin. At ₹77.30, I am paying 8.88 times earnings and 2.07 times book value. The Graham Number of ₹87.75 and margin of safety of 14.81% offer a cushion, but this is not a deep-value bargain. For a public-sector bank, paying twice book is a meaningful premium. The high government holding of 73.60% gives stability, but also means minority investors are tied to state-influenced capital decisions. The negative free cash flow of ₹-11,842 Cr looks alarming, but it is a common banking feature when loans are expanding rapidly; still, it demands capital. I will not anchor to the DCF value of ₹496.46; that seems far beyond the conservative Graham valuation. I would want either a lower entry price closer to book value or continued evidence that this 22% ROE is durable. It is a good growth story, but the margin of safety is only modest. A disciplined investor can watch, not chase.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer