Max Financial Services Ltd. share price target

VNB margins steady at 25% despite higher COVID claim provisions Max Life's overall APE grew by 36% YoY in Q4FY21 ending FY21 with 19.5% YoY growth best among peers and given the pandemic impact which was led by led by 18% FYP premium. Also protection growth of 10-12% YoY was better than peers, while product launches at start of FY21 augured well with non-par savings mix improving by 12% with doubling of APE in FY21. Max has done well at start of FY22 despite challenges from second wave. It should continue to gain market share with continued focus on non-par savings/protection and...

MAXLIFE continues to demonstrate resilient performance amid a challenging macro environment, led by healthy (36%) APE growth, aided by robust growth in Non-PAR savings and recovery in the ULIP segment. After...

IPru Life posted a 7% YoY growth on overall APE and 6% on individual APE, a first positive growth in 13 months. On FYTD21 new business de-grew -27% and is likely to end in negative growth for second consecutive year. IPru Life...

Growth momentum reviving in the proprietary channel MAX Life Insurance (MAXLIFE) has demonstrated a resilient performance amid a challenging macro environment, with 21% APE growth, led by robust growth in Non-PAR savings and a recovery in ULIP. After witnessing robust Protection growth over 1HFY21, the same has moderated during 3Q. Shareholders' PAT grew at 43% YoY during 3QFY21. Absolute VNB growth stood robust (65% YoY), led by a VNB margin of 28.6%. This has been supported by robust trends in Non-PAR savings and...

Traditionally a Par player, MAXLIFE has significantly diversified its product mix and has made significant strides to capture the protection and non-par segment. MAXF has been able to build a strong franchise with a profitable agency channel. AXIS bank transaction will also give more comfort to the renewal on the bancassurance tie-up which is due to expire in September 2021. MAXF has already delivered strong growth thus far and we believe stock price largely reflects the positives from the AXIS deal as well as top-line growth. As most positives are already...

Value of New Business (VNB) written during H1FY21 grew by 20% y-o-y, while New Business Margin (NBM) expanded by 320 bps y-o-y to 24.2%, helped by a shift in product mix towards NPAR- Savings and Protection products. EV was at Rs 11,047 Cr., with RoEV at 17.5%. We believe the Indian insurance sector has a long growth runway; and Max Life, with strong metrics, stable bancassurance partnership with Axis Bank, etc is well-placed to benefit from growth opportunities. Max Financial is available a reasonable valuation of 1.7x / 1.5x FY2022E / FY2023E MCap / EV; We maintain Buy with a revised PT of Rs. 750....

Max Financial Services' (MFS') deal with Axis Bank appears to be progressing positively, even though the lender will now buy a lower stake in Max Life Insurance Co. Ltd. (MLIC). Mutually altering the deal, Axis Bank now will acquire 17% in MLIC to increase its holding to 18% (lower than a 29% stake buy announced earlier). The companies have executed a definitive agreement to the effect but are yet to approach regulatory authorities with the revised applications. Axis Bank is one of the key bancassurance partners for Max Life, contributing ~57% (as...

Max Life's overall APE de-grew 4% YoY supported by decent growth in single & regular premiums. Protection segment remains the key focus with shift of Product mix to NPar savings and Protection as Par share is reduced. Margins disappointed and fell to 17% for 1Q21 despite of favorable product mix on account of lower interest rates and higher cost overruns. Approvals with respect to Axis/Max/MSI deal should not get into hurdle post queries from IRDAI/RBI but should take time. We retain HOLD with revised TP of Rs545...

Max Financial Services (MFS) posted modest numbers for Q4FY2020,with below expectations operating performance, and posted slower business growth in Value of New Business (VNB) and Annualised Premium Equivalent (APE) due to impaired collections because of the lockdown. The life insurance business, Max Life Insurance (MLIC, MFS has 72.5% shareholding) saw gross written premium (GWP) rise by 6% y-o-y, despite the lockdown, which impacted the last part of March, which typically is a seasonally important period for life insurance players. The 13th-month...

Max Life's overall APE grew 5% YoY supported by decent growth in single & regular premiums. Protection segment remains the key focus with shift of Product mix to NPar savings continuing. Margins remained stable YoY at 21.6% for FY20 (but improved sequentially to 22.8% in 4Q20) on account of support from NPar growth. Persistency has improved across all buckets except the 61m persistency (upto Mar'20 i.e.11m) being affected by the ULIP segment. We retain BUY with revised TP of Rs518 (Rs610) valuing Max Life based on 2.3x Mar-22 EV (from 2.6x Sep-22 EV), we reduce Holdco discount...