Motilal Oswal's research report on MAX Financial Services
MAX Financial Services (MAXLIFE) reported a strong quarter as VNB margin expanded sharply to 39.3% in 3QFY23 even as APE growth remained under pressure and declined 5% YoY (7% miss). Within segments, Non-PAR continued its robust momentum led by annuity business, while Individual Protection too saw an improvement. Others remained under pressure. Growth in APE was driven by the proprietary channels, which rose 13% YoY and contributed ~33% of overall APE. Conversely, the banca channel APE declined 12% YoY but recovered and jumped 36% QoQ. Management expects counter share to stabilize at ~70%, thereby sustaining the growth momentum over the medium term. We expect the VNB margin to sustain at ~30% and estimate an 18% APE CAGR over FY23-25. This would imply a 21% VNB CAGR over FY23-25E.
Maintain Neutral with a TP of INR900, premised on 2.2x Sep’24E EV and a holding company discount of 20%.
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