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Non-banking financial company (NBFC) Max Financial Services shares slipped 2.3 per cent to hit an intraday low of Rs 1,106.75 on BSE.
The fall in Max Financial shares came after 2.37 million shares of the company changed hands via multiple block deals. Buyers’ and sellers’ names, however, were not revealed.
At 12:05 AM, shares of Max Financial Services were trading 0.72 per cent or Rs 8.15 lower at Rs 1,124.75 per share. Meanwhile, the market capitalisation of the company at around the same time stood at Rs 38,844.39 crore, according to Bombay Stock Exchange (BSE).
The BSE shareholding pattern of Max Financial showed 5 promoters and promoter groups held a 6.52 per cent share in the company. Public shareholding stood at 93.48 per cent.
In the June quarter of financial year 2025 (Q1FY25), Max Financial Services’ new business margin squeezed 472 basis points (bps) year-on-year (Y-o-Y) to 17.5 per cent, as against 22.2 per cent in the same quarter a year ago (Q1FY24).
The NBFC’s Annualised Premium Equivalent (APE) jumped 31 per cent Y-o-Y to Rs 1,453 crore against Rs 1,113 crore a year ago.
Following a contraction in margin and growth in APE, Motilal Oswal raised its APE growth estimates. However, it cut the value of new business (VNB) margin assumptions given the adverse product mix trends (higher share of ULIPs).
The value of new business measures the profitability from the new policies sold during the year.
The brokerage recommends a ‘Neutral’ rating to Max Financial Services for a target price of Rs 1,030 per share. The target is premised on 2x March’26E enterprise value (EV) and a holding company discount of 20 per cent.
Furthermore, Motilal Oswal believes going forward, the surrender charges would hit the margins of the company by 100-200 bps, which will be offset by higher premium growth, new product launches, and restructuring of commissions.
In terms of growth, banca, and online channels are likely to maintain a strong growth momentum, the domestic brokerage added.
Max Financial stock performance
In the past year, Max Financial shares have gained 22.6 per cent against Sensex’s rise of 25.4 per cent.
First Published: Sep 05 2024 | 12:24 PM IST
