Neutral MAX Financial Services; target of Rs 900: Motilal Oswal

Motilal Oswal's research report on MAX Financial Services

MAX Financial Services (MAXLIFE) reported a healthy performance in 1QFY24 with APE/VNB growth of 10%/16% YoY, while VNB margins came in at 22.2%. The performance was broadly in line with our estimates. In 1QFY24, all products demonstrated a YoY growth, except for ULIPs, which declined 27% YoY (down 56% QoQ). Retail protection was up 26% YoY/down 23% QoQ. Group protection grew 10% YoY/ 36% QoQ. Total protection increased 16% YoY, while PAR business grew 10% YoY. Non-par savings rose 55% YoY (down 71% QoQ).

Outlook

We estimate a 14% APE CAGR over FY23-25, thus driving 10% VNB CAGR over FY23-25E. We reiterate our Neutral stance with a revised TP of INR900, premised on 2.0x Mar’25E EV and a holding company discount of 20%.

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