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Results
10-Nov-21
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Analysis
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Max Financial Services
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Healthy premium income growth, margin improves
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Max Financial Services (MFSL) has posted 30% decline in the net profit
to Rs 39.63 crore in the quarter ended September 2021 (Q2FY2022). The consolidated
revenues (excluding investment income) increased 33% to Rs 9325.40 crore in
Q2FY2022.
The company reported consolidated revenues
of Rs 15271 crore in H1FY2022, a growth of 21% from the year-ago period. The
consolidated Profit Before Tax (PBT) stood at Rs 134 crore, down 45% in H1FY22,
primarily due to recovery in investment value in last year.
Assets Under Management (AUMs) crossed the
Rs 1-trillion mark to reach Rs 100090 crore - an uptick of 29% from Rs 77764 crore
in the year-ago period.
During H1FY22, Max Life delivered a strong
performance on new business premiums (on APE basis) as it achieved a 18% jump
to Rs 2127 crore. Further, the renewal premium income (including group) rose
19% to Rs 5706 crore, taking the gross written premium to Rs 8815 crore, a
spurt of 21% over the same period in the previous financial year.
This strong performance was despite a more
severe impact of the second wave of COVID-19 compared with the first wave.
Claim experiences were higher than expected across all lines of businesses with
significantly higher variance for Protection and Group businesses.
Max Life maintained 4th rank in the private
industry. In terms of industry performance, Max Life once again posed robust
results as it grew 19% in H1FY22 compared with the year-ago period. On a 2-Year
CAGR, Max Life surpassed the other private players, growing at 11% while the
private industry grew 8%.
Max Life has maintained a sharp focus on
balanced product mix, which has aided a 24%-growth in the Value of New Business
(VNB) at Rs 546 crore compared with Rs 438 crore in H1FY21. The higher growth
in VNB was due to higher sales and change in business mix. The New Business
Margin for H1FY22 was 25.3% (at actual costs), an increase of 110 bps from
24.2% in the year-ago period
In addition, Max Life also achieved its
highest-ever quarterly margin of 29.1% in the second quarter vs 19.7% in the
first quarter driven by a balanced product mix.
Max Life reported an Embedded Value (EV) of
Rs 12988 crore, an uptick of 18% from Rs 11047 crore in the year-ago period
driven by growth in value of new business and quality of inforce business. The
Operating Return on EV (RoEV) in H1FY22 stood at 18%.
Further, Max Life was Appointed as “Sponsor”
of Pension Fund for managing assets under the country’s National Pension Scheme
(NPS). The formation of the Pension Fund subsidiary is underway as Max Life has
sought IRDAI’s permission to set up a new company “PFM” in line with the
regulatory requirements.
Mohit Talwar, Managing Director, Max
Financial Services, said, “Our robust performance in H1FY22 was driven by our
constant endeavors towards customer measures despite the immense pressure on
the overall sector due to the COVID-19 provisioning. Moving forward, this will
continue to remain an important priority. Approval to act as Pension Fund
sponsor will help us serve our customers even more comprehensively and this is
in line with our focus on the retirement segment.”
He added: “Max Life crossing the Rs
1-trillion mark in the Assets Under Management category showcases the faith
reposed in us by different stakeholders. Max Life will continue on this growth
trajectory.”
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Max Financial Services: Consolidated Financial Results
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Particulars
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2109 (3)
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2009 (3)
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Var %
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2109 (6)
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2009 (6)
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Var %
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2103 (12)
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2003 (12)
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Var %
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Income from operations
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9325.40
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7019.85
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33
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15267.45
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12524.46
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22
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31273.91
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18239.98
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71
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Other Income
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1.97
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0.26
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3.06
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12.97
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-76
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14.11
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1.78
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Total Income
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9327.37
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7020.11
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33
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15270.51
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12537.43
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22
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31288.02
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18241.76
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72
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Interest Expenses
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6.10
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0.05
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12100
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6.21
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0.13
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4677
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0.27
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0.28
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-4
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Other expenses
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9271.55
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6978.56
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33
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15129.25
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12342.80
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23
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30744.77
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17716.20
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74
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Gross profit
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49.72
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41.50
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20
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135.05
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194.50
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-31
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542.98
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525.28
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3
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Depreciation
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1.21
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1.19
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2
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2.58
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2.50
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3
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5.32
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11.37
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-53
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Profit before tax
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49.89
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95.51
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-48
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134.27
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246.21
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-45
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592.90
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442.48
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34
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Provision for tax
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2.24
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14.45
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-84
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50.80
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-16.38
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-410
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33.15
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169.63
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-80
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PAT
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47.65
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81.06
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-41
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83.47
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262.59
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-68
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559.75
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272.85
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105
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Minority Interest (MI)
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8.02
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24.67
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-67
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22.64
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75.35
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-70
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134.36
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127.86
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5
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PAT after MI
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39.63
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56.39
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-30
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60.83
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187.24
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-68
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425.39
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144.99
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193
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EPS*(Rs)
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4.6
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6.5
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3.5
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10.9
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12.3
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4.2
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* Annualized on current equity of Rs 69.02 crore. Face Value: Rs
2, Figures in Rs Crore
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Source: Capitaline Corporate Database
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