Neutral Max Financial Services; target of Rs 1750: Motilal Oswal

Motilal Oswal's research report on Max Financial Services

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). A shift in product mix toward non-par resulted in 32% YoY growth in VNB to INR3.4b (9% beat). This resulted in a VNB margin of 20.1% vs. 17.5% in 1QFY25 (est. 18.5%). The company reported EV of INR264.7b at the end of 1QFY26, reflecting RoEV of 20% and operating RoEV of 14.3% (14.2% in 1QFY25).

Outlook

We retain our estimates and expect a 25.0%/25.5% VNB margin in FY26/ FY27. Reiterate Neutral with a TP of INR1,750, premised on 2.4x FY27E EV and a holding company discount of 10%. The success of the reverse merger is key to further re-rating of the stock.