Conference Call with Max Financial Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full transcript.
Mohit Talwar, MD of MAX Financials - Key Comments
CCI and shareholder approval for the MSI swap transaction have been received. We had 99% shareholder support for this.
IRDA and DEA approvals are being processed, as far as we know this will close within a month or so. On the Axis transaction, the application is with the RBI and IRDAI. These are early days because we just sent across. The CCI approval is being sought in a couple of days.
On the financials - performance has been affected by the COVID19 pandemic. March is a robust month typically for the company, and the latter part is typically when the sales would happen. That was a washout because of the lockdown. We can tell you a little bit later how we have done in April and May - we have done some dramatic changes and the results of that are playing out now.
Consolidated revenues for FY20 at Rs 80,242 crores went up by 7% compared to last year. Gross premium grew 11% to Rs. 16,184 crores, consolidated profit was down 34% to Rs. 273 crore due to shift in product mix, investment in proprietary channels, and additional provisions we made for the impairment from one-time tax expense on settlement of tax dispute under The Direct Tax Vivad Se Vishwas Scheme.
On Max Life: MCEV (Post dividend payout) stood at Rs. 9,977 crore, Operating RoEV at 20.3%.
Structural NBMs (pre cost overrun) have expanded by 180 bps to 24.3%, however we have seen actual NBMs (post cost overrun) at 21.6% in line with the previous year. VNB (post overrun) has grown 5% to Rs 897 crore, driven by increase in proportion of Non-Par savings business but partly offset by lower new sales growth and acquisition cost overrun.
Individual APE grew by 5% to Rs 4,116 crore with market share maintained at 10%. Proprietary channel delivered 10% growth in FY20, faster than Banca growth of 3%.
Individual Protection sales grew 49% YoY, resulting in improvement in protection mix by 200 bps to 8% in FY20.
Max Life grew at 17% till YTD Feb, more than the private industry growth rate of 14%. Full year growth as mentioned earlier, was impacted by COVID-19 in Mar 20. Has maintained its rank of 4th in the private industry.