Emkay Global Financial has given Buy recommendation for Max Financial with a target price of Rs. 1030 in its research report issued on May 11, 2022

Emkay Global Financial’s report on Max Financial

Max Life reported a robust set of numbers in FY22 despite Covid-19-led disruptions to growth and mortality. The VNB margin threw a big surprise, expanding to 27.4% in FY22 (FY21: 25.2%; 9MFY22: 25.1%). Going ahead, Max Life will focus on growth through continued investments in its proprietary distribution channel and Axis Bank-led banca distribution channel, and responding to competition by improving products. Against this backdrop, the company has guided for a ~25-26% VNB margin, in line with our estimates. On the non-operational front (MAXF-Max Life merger, purchase of ~5.2% stake in Max Life by MAXF from Mitsui Sumitomo and up to 7% additional stake transfer to Axis Bank group), the status was broadly unchanged from 9MFY22.


Overall, the FY22 performance, especially on a relatively stronger base of FY21 and amid a difficult environment in multiple Covid waves, reinforces our belief in the long-term profitable growth potential of Max Life. After the recent sharp correction, the stock price of MAXF is valued attractively and does not reflect the true value of the underlying Max Life franchise. We reiterate our Buy rating with a revised target price of Rs1,030.

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