Max Financial Services Ltd. share price target

Axis Max Life Insurance (MAXLIFE) continued to report better-than-industry performance in 1QFY26, with new business APE growth of 15% YoY to INR16.7b (in line).

Over the past three years, Axis Max life has posted strong industry leading APE growth of 18% with 13% VNB CAGR. The management aspires to continue to grow APE in mid-teens (300-400 bps higher than industry) with VNB margin at 24-25% in FY26.

MAX Financial Services (MAXF) reported a steady performance in 3QFY25. The new business APE rose 17.4% YoY (in line) to INR21.1b. For 9MFY25, it came in at INR57.3b, up 26% YoY.

MAX Financial Services (MAXLIFE) reported a steady performance in 2QFY25. New business APE grew 31.3% YoY to INR21.7b (in-line), while for 1HFY25, it grew 31% YoY to INR36.2b.

MAX Financial Services (MAXLIFE) reported a weak performance in 1QFY25, mainly due to a sharp contraction of 470bp in VNB margin.

Q1FY25 numbers were a mixed bag, wherein APE growth was healthy but on the VNB front,
there was a big miss.

Max Financial Services (MAXLIFE) is seeing pension as a big opportunity over the medium term. The company is investing in its pension subsidiary and has set up a dedicated vertical to grow the annuity business.

MAX Financial Services (MAXLIFE) reported a decent performance in
4QFY24. Total APE grew 13% YoY to INR28.7b (14% beat), while absolute
VNB rose 7% YoY to INR8.2b (18% beat). VNB margin contracted 170bp YoY
to 28.6% (vs. our estimate of 27.6%)

While we are constructive on the long-term growth prospects of the LI sector, we believe major tectonic shifts will create near-term challenges, albeit preparing the industry for a cleaner insurance penetration. Contrary to expectations of relief in the Union Budget, life insurers are expected to be adversely impacted by the first-order and second-order changes proposed in the Finance Act'23. Conversation with industry experts suggest that the top four private life insurers are likely to witness 20-27% adverse impact on FY24E APE predominantly on account of the impending transition to the new tax regime. We flag high ceding charges in guaranteed NPAR savings as the next potential target as policymakers look to protect policyholder interest and improve life insurance (LI) penetration. While the demand for retail term protection remains subdued and the Apr-23 growth print was soft, we await evidence of medium-term growth momentum.

MAXLIFE reported a stable quarter due to strong APE growth, led by robust trend in PAR/ULIP segment, while Protection registered a healthy growth. Non-PAR, however, witnessed a decline. As a result, Protection mix moderated in 3QFY22. On the distribution front, both bancassurance and proprietary channel supported the growth momentum. VNB margin moderated to 24.9% in 3QFY22 (from 29.1% in 2QFY22), impacted by a shift in mix towards the ULIP with management guiding for margin to remain in the ~25-26% level. We expect VNB margin to sustain at...

The past few years have been challenging for Max Life, with the management's focus on simplifying the organization structure. Going forward, its primary focus would be on delivering superior growth (more than 20% over FY21-26E), with margin remaining range bound. It expects RoEV to remain similar to FY21 levels (18.5%). Growth would be led by a key focus on:...

MAXLIFE reported a mixed quarter as APE growth remains modest, impacted by sluggish growth in Protection/Non-PAR segment, while PAR/ULIP witnessed healthy growth. As a result, Protection mix moderated over 1HFY22. On the distribution front, the Bancassurance/proprietary channel supported the growth momentum. VNB margin expanded sharply to 29.1% in 2QFY22 (v/s 19.7% in 1QFY21), Financials & Valuations (INR b)...