Buy Max Financial Services: target of Rs 750: Sharekhan

Sharekhan's research repor on Max Financial Services

Max Financial Services (MFS) posted strong numbers for Q2FY2021, with strong Individual APE growth, encouraging growth in embedded value (EV) with market share gains (despite challenges due to COVID-19). 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.

Outlook

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.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More