Company Update : MAX Financial Services Ltd By Motilal Oswal Financial Services Ltd
APE and VNB margins in line
* Gross premium income grew 12.7% YoY to INR82.2b (in line). For 9MFY25, it came in at INR213.6b, up 14% YoY. Renewal premium grew 13.3% YoY to INR52.2b (in line).
* Total new business APE rose 17.4% YoY (in line) to INR21.1b. For 9MFY25, it came in at INR57.3b, up 26% YoY.
* 3QFY25 VNB remained flat YoY (in line) at INR 4.9b. VNB margins contracted to 23.2% from 27.2% in 3QFY24 and 23.6% in 2QFY25 (MOFSLe: 23.5%).
* ULIPs continued to exhibit strong growth momentum, reporting 70% YoY growth. Retail Protection and Group Credit Life grew 37% and 18% YoY, respectively. The Par segment reported a 16% YoY decline.
* 3Q shareholder PAT declined 54% YoY to INR0.7b (56% miss). For 9MFY25, it reported a PAT of INR3.7b, down 11% YoY.
* Solvency ratio stood at 196% in 3QFY25 vs. 179% in 3QFY24 and 198% in 2QFY25. ? AUM grew 20.4% YoY to INR1.72t.
* Valuation and view: MAXLIFE reported weak margins due to the continued popularity of ULIPs. Overall, the share of non-PAR savings improved during 3QFY25. The proprietary channel maintained a strong growth trajectory on account of agency, cross-sell, and e-commerce. Persistency trends improved across cohorts. We will review our estimates and TP after the earnings call scheduled for 05th Feb’25.
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