On Thursday, Max Financial Services (MAXF:IN) received a vote of confidence from Jefferies as the firm increased its price target on the stock to INR1,660, up from the previous INR1,270. The financial services company retained its Buy rating following an impressive performance in the second quarter of the fiscal year 2025.
Max Financial Services reported a notable 23% year-over-year growth in Value of New Business (VNB), which was propelled by a 31% surge in premium growth. This success was attributed to improved margins resulting from increased scale and a higher attachment rate of protection products. The firm's recent rebranding initiative, which now includes Axis Bank, was also highlighted as a potential catalyst for enhanced sales and cost efficiency.
Analysts from Jefferies expressed optimism over the manageable impact of new surrender norms on the company. They adjusted their VNB estimates, now expecting a compound annual growth rate (CAGR) of 15% from fiscal year 2024 to 2027. The valuation of Max Financial Services, at 1.9 times the fiscal year 2026 estimated Price to Embedded Value (PEV) and 10 times Price to VNB, was noted as being among the most attractive in the life insurance sector.
As a result of these factors, Max Financial Services continues to be one of the top picks in the life insurance industry, according to Jefferies. The firm's analysis suggests that the company's current valuation presents an appealing opportunity for investors.
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