Max Financial Services Q3 Review - VNB Margin Improves Sharply Aided By A Shift In Product Mix: Motilal Oswal

Absolute new business value spiked 50% YoY to Rs 5.9 billion (20% beat).

<div class="paragraphs"><p>An applicant filling a form. (Source: Alexey Tulenkov/ freepik)</p></div>
An applicant filling a form. (Source: Alexey Tulenkov/ freepik)

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Motilal Oswal Report

Max Financial Services Ltd. reported a strong quarter as value of new business margin expanded sharply to 39.3% in Q3 FY23 even as annual premium equivalent growth remained under pressure and declined 5% YoY (7% miss).

Within segments, non-participating 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.

Max Financial Services expects counter share to stabilise at ~70%, thereby sustaining the growth momentum over the medium term.

We expect the value of new business margin to sustain at ~30% and estimate an 18% APE compound annual growth rate over FY23-25.

Click on the attachment to read the full report:

Motilal Oswal Max Financial Services Q3FY23 Results Review.pdf
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