Emkay Global Financial has given Buy recommendation for Max Financial with a target price of Rs. 930 in its research report issued on Oct 21, 2022

Emkay Global Financial’ research report on Max Financial

Max Financial reported decent financial performance for H1FY23 despite the muted APE growth being known. For H1FY23, APE growth slowed to only 1.9% YoY on account of challenges in the banca channel, led by Axis Bank (APE: -7% YoY in H1FY23) and offset by the strong performance in the proprietary channel (+23% YoY). Driven by favorable product mix, VNB margin for H1 was 26.7%, which led to VNB for H1 logging at Rs5.9bn, at 5% above our estimates. On net basis, H1FY23 results were on expected lines. Key drivers for Max Financial’s shares are likely to be: 1. Return of growth in the banca channel and; 2. Tangible progress in the simplification of the corporate structure. Reflecting developments of lower growth, better VNB margins, and impact of rising yields in H1, we have tweaked our FY23-25 estimates, leading to 10-12% reduction in VNB estimates and 5-6% reduction in EV estimates.


We reiterate our BUY rating on Max Financial with a revised Sep-23E TP of Rs930 (FY23E P/EV 2.5x).

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