Max Financial Services (MFSL) Q1 24/25 earnings summary

Executive summary

• Achieved robust new sales growth in Q1 FY25, with individual adjusted first year premium up 27% year-over-year, outpacing private sector and industry growth rates.

• Total APE grew 31% and number of policies increased 27% in Q1 FY25; proprietary channels contributed 49% of sales, growing 60%.

• Recognized as a top employer, with a 99.65% claims paid ratio and improved Net Promoter Score from 56 to 59 between March and June 2024.

• Private market share expanded to 8.8%, up 22 bps YoY; leadership in e-commerce and online protection/savings maintained.

• Board approved unaudited standalone and consolidated financial results for the quarter ended June 30, 2024, and noted the limited review by statutory auditors.

Financial highlights

• Consolidated revenue (excluding investment income) rose 11% to INR 5,235 crore; consolidated PAT up 54% to INR 156 crore.

• Max Life renewal premium grew 10% to INR 3,323 crore; gross premium up 11% to INR 5,399 crore.

• Value of new business (VNB) at INR 254 crore, up 3% year-over-year; NBM at 17.5%.

• Embedded value at INR 22,043 crore, aided by INR 1,612 crore capital infusion from Axis; annualized operating ROE at 14.2%.

• Assets under management crossed INR 161,000 crore, up 35% year-over-year.

Outlook and guidance

• Management remains confident in achieving mid-teens VNB growth for FY25, with margin guidance of 25-26% subject to regulatory changes.

• Regulatory changes on surrender values expected to impact margins by 100-200 bps, with mitigation expected over 3-6 months post-implementation.

• Continued focus on proprietary channel growth, product innovation, and digital transformation.

• Product mix to be rebalanced in H2 FY25, with phased introduction of new products between August and September.

• Management believes there is no financial impact from the recent PIL regarding Axis Bank's investment in Max Life, following the Delhi High Court's decision to decline the PIL and direct regulators to complete their inquiry.