Brokerages are Raising Targets on Max Financial

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Brokerages are Raising Targets on Max Financial

By Aditya Raghunath

Investing.com -- Max Financial Services Ltd (NS: MAXI ) reported total income of Rs 9,760.31 crore for the March 2021 quarter, up 128.81% from Rs 4,265.64 crore it had reported in the March 2020 quarter.  It reported a net profit of Rs 70.03 crore in the March 2021 quarter.

“A steep surge in the profit after tax (net profit) was largely due to higher investment income, reversal of provision for impairment on financial assets, low tax expense and a partial offset by new business strain due to shift in product mix towards non-par business,” it said.

Brokerages are bullish on the stock after its results. CLSA has given the stock a target price of Rs 1,350. It said that Max has narrowed its cost gaps compared to peers and it has a diversified product mix. It also has one of the fastest-growing banca partnerships, and its ROEVs are one of the highest in the industry. 

Two other global brokerages, Jefferies and Nomura have also increased their target on the stock to Rs 1,200. Nomura said that the stock is best in class when it comes to metrics and Jefferies said that strong premium growth justifies its higher target.

Motilal Oswal (NS: MOFS ) has recommended a buy on the stock with a price target of Rs 1,200. It expects a 22% CAGR (compounded annual growth rate) in APE growth over FY21-23E.

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