Capitaline

Results 14-Aug-24

Analysis

Max Financial Services

VNB up 3% in Q1FY2025

The income from operation of Max Financial Services increased 28.69% to Rs 11798.84 crore as on 30 June 2024. The revenue of Life Insurance (99.95% of total revenues) segment has gone up 28.72% to Rs 11,797.52 crore. The revenue of Business Investments (0.05% of total revenues) segment has gone down 12.04% to Rs 6.43 crore.

PBIT of Life Insurance segment rose 51.35% to Rs 192.89 crore (accounting for 102.69% of total PBIT). PBIT of Business Investments reported loss of Rs 5.05 crore (accounting for (-)2.69% of total PBIT) compared to loss of Rs 3.48 crore.

The Capital employed for Life Insurance (0.00% of total) segment has gone down 100.00% to Rs 0.00 crore.

Overall OPM has increased to 1.60% as on 30 June 2024 from 1.36% as on 30 June 2023, leading to 50.88% rise in operating profit to Rs 188.56 crore. Other expenditure as a percentage of total income moved down to 98.35% from 98.52% as on 30 June 2024. The staff cost as a percentage of total income declined to 0.06% from 0.12% as on 30 June 2024. The provisions as percentage of total income declined to 0% from 0% as on 30 June 2024.

Other income declined 4.49% to Rs 3.19 crore. Interest cost declined 0.43% to Rs 9.28 crore. Depreciation moved down 27.27% to Rs 0.72 crore. PBT moved up 54.03% to Rs 181.75 crore.

The effective tax rate declined to 14.20% as on 30 June 2024 compared to 14.30% as on 30 June 2023. .Provision for tax was expense of Rs 25.81 crore, compared to Rs 16.87 crore. Profit after tax rose 54.20% to Rs 155.94 crore.

There was profit attributable to non-controlling interest of Rs 28.65 crore as compared to Rs 13.45 crore. The share of profit of associate were nil in both the periods. Finally, Net profit attributable to owners moved up 45.18% to Rs 127.29 crore.

Business performance

New Business Premium (Individual and Group) grew by 12% to Rs 2075 crore and Individual Adjusted First Year Premium grew by 27% to Rs 1260 crore leading to private market share gain by 22 bps to 8.8%.

Number of new retail policies grew by 27%. Renewal premium rose 10% to Rs 3,323 crore, taking the Gross Written Premium to Rs 5399 crore, an increase of 11% over the previous financial year.

Profit before Tax grew by 46% to Rs 151 crore in Q1FY25.

Embedded value grew by 30%, standing at Rs 22043 crore

Operating RoEV is at 14.2%.

VNB grew by 3% at Rs 254 crore during Q1FY25 from Rs 247 crore at Q1FY24.

Total Annualised Premium Equivalent (APE) rose by 31% to Rs 1453 crore in Q1FY25.

Prashant Tripathy, CEO and MD, Max Life, said, “At Max Life, we are committed to delivering consistent and sustainable business outcomes. Our performance in Q1FY25 reflects this focus, with secular growth in Individual Adjusted First Year Premium and an expanded presence in the private market. These results highlight the effectiveness of our strategic priorities - scaling proprietary channels, building strong partnerships, and reaching new customer segments. As we move forward, we remain dedicated to creating lasting value for our customers, shareholders, and partners.”

In Q1FY25, Max Life’s Proprietary channels’ Annual Premium Equivalent (APE) grew by 60% in Q1FY25 on Y-o-Y basis secular growth driven within Agency, Cross-sell and E-commerce. The contribution of Proprietary channels to total new sales increased from 40% in Q1FY24 to 49% in Q1FY25. The company maintained leadership position in overall E-commerce business with Rank #1, both in online Protection, and in online Savings. The new business growth was fuelled by strong growth in Protection & Health, Group Credit Life and Retail Annuity business. Protection & Health grew by 53%, Group Credit Life grew by 49% and Retail Annuity business by 42%. Additionally, Max Life has successfully on-boarded 7 new partners in Q1FY25, including Catholic Syrian Bank Limited (CSB Bank).

Focusing on product innovation, Max Life launched a Flexi Cap Fund predominantly for the E-Commerce and Banca Customers in Q1FY25 designed to capitalize increasing interest in Index funds. The Company also introduced the Max Life Smart Wealth Annuity Guaranteed Pension Plan - Limited Pay variant with a feature to personalize retirement planning, an industry-first initiative.”

Financial Performance FY2024

The income from operation of Max Financial Services increased 48.27% to Rs 46576.22 crore in FY2024. The revenue of Life Insurance (99.93% of total revenues) segment has gone up 48.44% to Rs 46,565.72 crore. The revenue of Business Investments (0.07% of total revenues) segment has gone down 52.20% to Rs 30.92 crore.

PBIT of Life Insurance segment fell 19.39% to Rs 427.26 crore (accounting for 102.61% of total PBIT). PBIT of Business Investments reported loss of Rs 10.87 crore (accounting for (-)2.61% of total PBIT) compared to profit of Rs 16.27 crore.

The Capital employed for Life Insurance (36.39% of total) segment has gone up 11.79% to Rs 3,900.62 crore. The Capital employed for Business Investments (63.61% of total) segment has gone down 0.00% to Rs 6,818.50 crore.

Overall OPM eased to 0.90% in FY2024 from 1.75% in FY2023, leading to 23.84% fall in operating profit to Rs 419.56 crore. The provisions as percentage of total income declined to 0.01% from 0% in FY2024. Other expenditure as a percentage of total income moved up to 99.03% from 98.16% in FY2024. The staff cost as a percentage of total income declined to 0.08% from 0.09% in FY2024.

Other income increased 128.87% to Rs 42.09 crore. There is 16.50% rise in interest cost at Rs 43.64 crore and 31.10% decline in depreciation to Rs 3.19 crore, Profit before tax fell 21.32% to Rs 414.82 crore. There is no extraordinary item. After which, PBT moved down 21.32% to Rs 414.82 crore.

The effective tax rate declined to 5.36% in FY2024 compared to 14.28% in FY2023. Provision for tax was expense of Rs 22.24 crore, compared to Rs 75.31 crore. Profit after tax fell 13.12% to Rs 392.58 crore.

There was profit attributable to non-controlling interest of Rs 52.50 crore in FY2024 as compared to profit of Rs 73.41 crore in FY2023. The share of profit of associate were nil in both the periods. Finally, Net profit attributable to owners fell 10.15% yoy to Rs 340.08 crore in FY2024.

Max Financial Services : Consolidated Results
Particulars	2406 (3)	2306 (3)	Var %	2403 (12)	2303 (12)	Var %
Income from Operations	11798.84	9168.12	29	46576.22	31412.67	48
OPM (%)	1.60	1.36		0.90	1.75
OP	188.56	124.97	51	419.56	550.90	-24
Other Inc.	3.19	3.34	-4	42.09	18.39	129
PBDIT	191.75	128.31	49	461.65	569.29	-19
Interest	9.28	9.32	0	43.64	37.46	16
PBDT	182.47	118.99	53	418.01	531.83	-21
Depreciation	0.72	0.99	-27	3.19	4.63	-31
PBT before EO	181.75	118.00	54	414.82	527.20	-21
Tax Expenses	25.81	16.87	53	22.24	75.31	-70
PAT	155.94	101.13	54	392.58	451.89	-13
Non-controlling interest	28.65	13.45	113	52.50	73.41	-28
Share of P&L from Asso.	0.00	0.00	-	0.00	0.00	-
Net profit	127.29	87.68	45	340.08	378.48	-10
EPS (Rs)*	14.8	10.2		9.9	11.0
EV (Rs)/share	638.7	493.0		567.3	473.3
* Annualised on current equity of Rs 69.02 crore, Face value of Rs 2, Excluding extraordinary items.
Figures in Rs crore
Source: Capitaline Corporate Database

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