Company Update : Max Financial Services Ltd By Motilal Oswal Financial Services Ltd
APE in line; VNB margins expand to 20.1%, beating estimates
- Gross premium income grew 19% YoY to INR64b (in line). Renewal premium rose 17% YoY to INR38.7b (in line).
- Total new business APE grew 15% YoY (in line) to INR16.7b, with non-par savings contribution increasing to 33% (27% in 1QFY25) and non-par protection contribution rising to 23% (20% in 1QFY25). ULIP contribution declined to 33% (39% in 1QFY25).
- Shift in product mix toward non-par resulted in 32% YoY growth in VNB to INR3.4b (9% beat). This resulted in VNB margin of 20.1% vs. 17.5% in 1QFY25 (est. 18.5%).
- PAT stood at INR0.9b (INR1.6b in 1QFY25).
- Solvency ratio stood at 199% in 1QFY26 vs. 203% in 1QFY25.
- AUM grew 14% YoY to INR1.83t.
- The company reported EV of INR264.7b at the end of 1QFY26, reflecting RoEV of 20% and operating RoEV of 14.3% (14.2% in 1QFY25).
Valuation and view: MAXLIFE maintains an industry-leading APE growth trajectory. VNB margin continued to witness robust YoY improvement on account of a decline in share of ULIPs, while the share of non-PAR savings improved during 1QFY26. The proprietary channel maintained a strong growth trajectory on account of agency, cross-sell, and e-commerce, while the bancassurance channel posted strong growth in non-axis partnerships. Persistency trends improved across long-term cohorts. We will review our estimates and TP after the earnings call scheduled for 8th Aug’25.
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