Emkay Global Financial's report on Max Financial
Max Life reported a robust set of numbers in FY22 despite Covid-19-led disruptions to growth and mortality. The VNB margin threw a big surprise, expanding to 27.4% in FY22 (FY21: 25.2%; 9MFY22: 25.1%). Going ahead, Max Life will focus on growth through continued investments in its proprietary distribution channel and Axis Bank-led banca distribution channel, and responding to competition by improving products. Against this backdrop, the company has guided for a ~25-26% VNB margin, in line with our estimates. On the non-operational front (MAXF-Max Life merger, purchase of ~5.2% stake in Max Life by MAXF from Mitsui Sumitomo and up to 7% additional stake transfer to Axis Bank group), the status was broadly unchanged from 9MFY22.
Overall, the FY22 performance, especially on a relatively stronger base of FY21 and amid a difficult environment in multiple Covid waves, reinforces our belief in the long-term profitable growth potential of Max Life. After the recent sharp correction, the stock price of MAXF is valued attractively and does not reflect the true value of the underlying Max Life franchise. We reiterate our Buy rating with a revised target price of Rs1,030.
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.