Buy Max Financial Services; target of Rs 1000: Sharekhan

Sharekhan's research report on Max Financial Services

Q3FY21 results were strong; Max Life Insurance (MLI) clocked robust 37% growth in VNB, driven by strong 22% growth in APE, and a robust 270 bps expansion in VNB margin to 26.5%. We see operating leverage benefits kicking in going ahead, as improving business mix would support VNB margins; we believe Indian insurance market has attractive growth opportunities. Stock available at 2.1x / 1.8x FY2022E / FY2023E EVPS; valuations are reasonable and are still at a discount to some bank-owned life insurance companies.

Outlook

Deal with Axis positive and will provide re-rating boost; we maintain a Buy rating with a revised price target (PT) of Rs. 1,000.

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