Max Life’s Q1 metrics mixed but outlook keeps investors hooked

Shares of Max Financial Services Ltd have been on an upswing since April and have outperformed peers, such as HDFC Life Insurance Co. Ltd, and even the broad Nifty50 index.

The June-quarter metrics of its subsidiary, Max Life Insurance, were mixed, but the outlook provided by the management seems to offer succour to investors.

Max Life Insurance reported a 32% year-on-year (y-o-y) increase in business based on annualized premium equivalent (APE) as its partnership with Axis Bank ensured an increase in product sales. Axis Bank branches contributed 63% of the total business during the quarter, even as proprietary distribution channel suffered due to the regional lockdowns triggered by the second wave of covid-19.

Indeed, the effect of the restrictions was visible on business growth, too. Max Life’s APE showed a 54% sequential drop, a fallout of the second wave and seasonality.

Nevertheless, the life insurer managed to maintain the market share it had gained in the March quarter at 11%.

The management has indicated that a surge in sales through online channels, focus on annuities and robust growth in individual protection plans should help growth.

“Considering a gradual shift towards a more profitable product mix and relatively comfortable valuations, we continue to like Max Life,” analysts at Emkay Global Financial Services Ltd said in a note.

NEWS CREDIT: LIVE MINT

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