Max Financial Services: Growth to pick up over FY21-26; margin trajectory stable
Source: IRIS | 02 Dec, 2021, 12.04PM
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| Rating: NAN / 5 stars. |
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 The past few years have been challenging for Max Life, with the management's focus on simplifying the organization structure. Going forward, its primary focus would be on delivering superior growth (more than 20% over FY21-26E), with margin remaining range bound. It expects RoEV to remain similar to FY21 levels (18.5%), stated Motilal Oswal Institutional Equities.
The management's primary focus would be on the Protection and Retirement segment. Growth via the proprietary channel is likely to remain strong, while banca will continue to deliver healthy growth. Persistency trends have improved, while cost ratios should remain modest.
Motilal Oswal estimates 21% APE CAGR over FY21-24E, with VNB margin sustaining at 25-26%. "This would enable 24% VNB CAGR over FY21-24E, while operating RoEV would sustain ~22%. We maintain Buy rating with an unchanged TP of Rs 1,250 per share (3.6x Sep'23E EV with a 20% holding company discount)."
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