Motilal Oswal Recommends Buying This Financial Service Stock For +29% Upside

Target Price

The Current Market Price (CMP) of Max Financial Services is Rs. 968. The brokerage firm, Motilal Oswal has estimated a Target Price for the stock at Rs. 1250. Hence the stock is expected to give a +29% return, in a Target Period of 1 year.

Company performance

About Max Financial Services, Motilal Oswal informed, "Agency channels are enabled with digital assets to reduce the onboarding time for agents by 50%. Its focus remains on cross-selling by building digital integration, which has improved to 31% in FY21 v/s 27% in FY20. Its overall goal is to be a leading digital-first Life Insurer over the next 12-18 months. The company is looking to increase sales by 7-9x over the next 5 years." In FY21, the company's ~16% of the customers were acquired online. Their proprietary offline, grew at 17% CAGR over the past 5 years.

Comments by Motilal Oswal

Motilal Oswal said, "We estimate 21% APE CAGR over FY21-24E, with VNB margin sustaining at 25-26%. This would enable 24% VNB CAGR over FY21-24E, while operating RoEV would sustain ~22%. We maintain our Buy rating with an unchanged Target Price of Rs. 1,250 per share (3.6x Sep'23E EV with a 20% holding company discount)."

About the company

Max Life has been at the forefront of driving product innovation by launching various firsts in the industry. The management's focus is on using AI-built technology to move 70% of its workload to the Cloud by FY24.

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.