Hold Max Financial Services; target of Rs 545: Prabhudas Lilladher

Prabhudas Lilladher's research report on Max Financial Services

Max Life’s overall APE de-grew 4% YoY supported by decent growth in single & regular premiums. Protection segment remains the key focus with shift of Product mix to NPar savings and Protection as Par share is reduced. Margins disappointed and fell to 17% for 1Q21 despite of favorable product mix on account of lower interest rates and higher cost overruns. Approvals with respect to Axis/Max/MSI deal should not get into hurdle post queries from IRDAI/RBI but should take time.

Outlook

We retain HOLD with revised TP of Rs545 (Rs518) valuing Max Life based on 2.4x Mar-22 EV.