Buy Max Financial; target of Rs 1060: Emkay Global Financial

Emkay Global Financial's research report on Max Financial

Max Life reported a good set of numbers in Q1FY23. VNB growth stood at 23% YoY, led by 1.4ppts YoY VNB margin expansion and 15% APE growth. Struggle in retail protection and the impact of Axis Bank going fully open architecture from Q3FY22 had its bearing on growth. Going forward, retail protection growth and Axis Bank channel performance should improve from Q3FY23. Max Life reiterated its commitment to deliver growth by continued investments in its proprietary distribution channel and Axis Bank-led distribution channel, while responding to competition by improving product attractiveness for customers. In this backdrop, Max Life is guiding for 25-26% VNB margin target, in line with our estimates. On the non-operational front (Max Financial-Max Life merger, purchase of ~5.2% stake in Max Life by Max Financial from Mitsui Sumitomo, and up to 7% additional stake transfer to Axis Bank group), the status was broadly unchanged from FY22. Overall, Q1FY23 performance was good.

Outlook

We reiterate our Buy rating with a revised TP of Rs1,060.

For all recommendations report, click here