In the results season for quarter ended 30th June 2021, so far (upto 22nd July), 7 banks and NBFCs have declared earnings, namely:

    HDFC Bank
    Bajaj Finance
    L&T Fin
    CSB Bank
    Indian Bank
    Bank of Maha
    South Indian Bank

One thing common was sequential deterioration in asset quality i.e. net NPA as of 30.6.21 was higher than net NPA as of 31.3.21 for all of the above, except for Bank of Maharashtra (BoM), which reported lower net NPA of 2.22% as of 30.6.21, down from 2.48% as of 31.3.21 and much lower than 4.10% as of 30.6.20.

BoM’s advances also grew QoQ by 3.4% to Rs. 1.06 lakh cr, which is another bullish data point as most mid-sized financials are wary of lending given higher risk aversion.

May be this got overlooked by market and share ended 2.3% lower yesterday, post result announcement.

It seems that the market is just speculating on stake sale news, which is being confused and vitiated by the vested interests and Media.

If stake sale happens, all these positives will fetch better valuation for BoM, while we hold our view of BoM seen having bright chance of strategic sale.

This is not a buy or sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.