Buy Max Financial Services; target of Rs 1925: Prabhudas Lilladher

Buy

Prabhudas Lilladher's research report on Max Financial Services

We met with the management of Axis Max Life to identify key drivers of growth and margin outlook over the medium-term. Company expects tailwinds from strong protection growth in H2 and has launched new products across PAR/ NPAR and annuity to drive growth. It expects agency/ e-commerce channel and new banca partners to sustain growth momentum over the medium-term. While FY26E VNB Margin is likely to see a drag from GST exemption due to nonavailability of ITC, it expects re-balancing of product mix (towards NPAR/ protection) and cost optimization initiatives to absorb the hit. We build a positive margin profile - 24.2%/ 24.6% for FY26/ FY27E as the share of NPAR/ protection improves.

Outlook

We value Max Life using the Appraisal Value framework with a TP of Rs 1,925 (2.1x FY27E P/EV vs. 2.0 earlier). Strong outlook on growth and margin trajectory to be key positives. Retain BUY.

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Max Financial Services - 01122025 - prabhu