Shares of Max Financial jumped more than 7% in trading on Wednesday to a record high of 798.75 rupees after the company reported strong Q3FY21 numbers.
Max Financial has announced a 54% increase in its consolidated net profit to Rs 227 crore in the third quarter of the current financial year. It reported a profit of Rs 147 crore in the same quarter of the previous financial year. Its consolidated revenue rose 68% to Rs 8,990 crore YoY due to higher investment income, the company said in an exchange filing.
“MFSL had a strong quarter with our subsidiary Max Life recording impressive VNB and Individual Adjusted Sales. sales and margin expansion,” Mohit Talwar, MD said in an exchange filing.
Operationally, EBITDA during this period jumped over 56.71%. “Our business device, which was rapidly digitized in the wake of a global pandemic, has played an important role in helping Max Life continue to grow despite the headwinds of COVID-19. In fact, we gained 158 points from base to maintain our private market share at nearly 11%,” he added.
Nomura has a “buy” call on the stock with a target of Rs 875 per share. It predicts 23% CAGR growth in enterprise value for new businesses, while it expects robust 19% growth in its annual bonus equivalent in FY20-23 .
The company is making progress in closing its deal with Axis Bank. With CCI approval, Axis Bank and its subsidiaries will acquire a 12% stake in Max Life. The company is awaiting IRDAI’s decision.
Max Life is the only subsidiary of MFSL, the latter holding more than 93% of the capital of the former.
“Our focus over the coming year will be to close the deal as well as continue our digitization program with equal attention to expanding exclusive sales and improving persistence through higher increased renewal and collection,” he added.
As of 11:30 a.m., its shares were trading over 7% on BSE at Rs 790.35.