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Systematix Report
The brokerage firm has maintained its Buy rating for Max Financial Services Ltd. with unchanged price target of Rs 2100 valuing the company at 2.6x on its FY28E embedded value per share of Rs 956 with a holding company discount of 15%.
MAX Financial Services' calculated Q4 FY26 VNB came in at Rs 1,014 crore (lower by -4% against estimate) up by 53.9% QoQ and 19% YoY. The VNB margin for the quarter was 28.2% and for the full year it was 25.2% (company earlier guided 24-25% for FY26.
The various factors that would have aided the company to achieve its guidance and moderate the adverse impact of no input tax credit are -
- better product mix,
- yield curve benefits (prices not passed on yet in Annuity) and
- negotiations on commission with the distributors.
The brokerage assumes the company to maintain its VNB margin around the 25% mark going forward. The company has posted strong annual premium equivalent growth for the quarter of 31.5% QoQ and 18.3% YoY.
The strong YoY growth was driven by Annuity which grew by 179% YoY and individual protection which grew by 52% YoY. For the year FY26 the APE stood at Rs 10,502 crore up by 19.7% YoY.
Going forward the management has earlier guided to grow 3% to 4% points above the industry growth.
The brokerage maintains its Buy rating for Max Financial Services with unchanged price target of Rs 2100 valuing the company at 2.6x on its FY28E EV per share of Rs 956 with a holding company discount of 15%.
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