Target: ₹930

CMP: ₹704.75

We hosted Max Financial Services’ (MAXF) management for meetings with DIIs to discuss the company’s business performance and growth trajectory as well as investor concerns.

Amrit Singh – CFO (Max Life and MAXF) and Ankur Gupta from Investor Relations represented the company. Key highlights: Post acquisition of 5.17 per cent stake in Max Life from Mitsui Sumitomo to MAXF, the company is well on track to transfer an additional 7 per cent stake in Max Life to Axis Bank group entities, and thereafter proceed towards streamlining the holding company structure.

Growth in proprietary channels remains strong and channel growth should accelerate in Axis Bank from January 2023.

Owing to the slower YTD-FY23 growth leading to a favourable product mix, the FY23 margin should be better. The promoter remains committed to reducing his pledge and confirms his intent to hold on to his MAXF ownership.

Double whammy

Hurt by the double whammy of falling growth and deferral in structure simplification, including the delay and penalty from the regulatory end, MAXF shares have materially underperformed the broader market and peers.

Once it makes progress in structure simplification and sees revival in growth, its share price should witness sustained re-rating, in our view. We reiterate our BUY rating on the stock, with our TP of ₹930/share.