Max Financial Services Price Target Revised to Rs 2075 by Prabhudas Lilladher

Max Financial Services Sees Sustained Growth Momentum in FY27E

In its research report, Prabhudas Lilladher has highlighted the robust growth of Max Financial Services in the fourth quarter of fiscal year 2026 (Q4FY26), driven by significant growth in the protection, participating accident and risk (PAR) and unit-linked insurance products (ULIP) segment. The company's annual premium equivalent (APE) grew by 18% year-over-year (YoY) in Q4FY26, a trend that is expected to sustain in fiscal year 2027 (FY27E).

The research firm expects the growth momentum to continue in FY27E and FY28E, with an APE growth of 17% and 16% respectively. This growth is expected to be driven by an uptick in retail protection and annuity sales, as well as a recovery in non-participating accident and risk (NPAR) and credit life business.

Despite the drag from the Goods and Services Tax (GST) exemption, Max Financial Services' value of new business (VNB) margin expanded to 28.2% in Q4FY26. This expansion was driven by a re-pricing of term products by 2-3% and a favorable product mix.

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Margin Estimates Revised Upward

Prabhudas Lilladher has revised its margin estimates upward by 30/10 basis points to 25.0%/25.1% for FY27/FY28E, factoring in the company's strong performance in FY26. The research firm has also rolled-forward its valuation to March 2028 and used the Appraisal Value framework to value Max Financial Services. The target price (TP) for the company has been set at INR 2,075, which is equivalent to 1.9 times the estimated price-to-earnings (P/E) ratio for fiscal year 2028 (FY28E).

Recommendation

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Prabhudas Lilladher has reiterated its 'BUY' recommendation for Max Financial Services, based on the company's sustained growth momentum and revised margin estimates.