Max Financial Services business remains highly profitable with 21% medium-term operating RoEV
Chirag Batavia • 17 January 2022
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Max Financial Services (MFSL)
- The business remains highly profitable with 21% medium-term operating RoEV.
- VNB margin will likely expand to 26.5% from 25.3% in 1HFY21 – this reflects the benefit of higher volumes in 2H and interplay of renewed focus on protection and non-par business (low base of 4QFY21), offset by higher ULIPs.
- A high APE base will likely suppress yoy APE growth in 2H although large Covid-related reversals in 4QFY21 will provide some support to VNB.
- Axis Bank remains a strong medium-term growth driver even as a balanced product mix and continued focus on protection will sustain high margins.
- At our FV, the stock will trade at 3.1X EV December 2023E.
Note: The above is a brief note on the company, based on the inputs of the KIE research report dated 10th November 2021, which is available on their website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Disclaimer: http://bit.ly/2n5AxIE
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Lakshit Financial Authorized Person of Kotak Securities Limited in cash segments of BSE & NSE and NSE F&O segments with NSE. Lakshit Financial registration number: BSE CASH AP0106730124228 | NSE CASH AP029177621 | NSE F&O AP029177621.Registered Office: Lakshit Financial, ASM 7, Ashwin Sector, Mumbai Agra Highway, CIDCO, Nasik 422009, Maharashtra, India. Kotak Securities Limited. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. CIN: U99999MH1994PLC134051. SEBI Registration No. INZ000200137 (Member of NSE, BSE, MSE, MCX & NCDEX). Member Id: NSE-08081; BSE-673; MSE-1024; MCX-56285; NCDEX-1262. AMFI ARN 0164, PMS INP000000258 and Research Analyst INH000000586. NSDL/CDSL: IN-DP-NSDL-23-97.
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Home First Finance (HOMEFIRST) Home First remains consistent on operational and financial parameters. Home First (HFFC) reported 24% earnings growth, with 19% net interest income growth in Q2FY25. Gross stage-3 ratio was flat qoq at 1.7%, stage-2 ratio declined 6 bps qoq to 1.1%. While other asset classes have reported mixed trends residential home loans, as an asset class, continues to stand tall. Home First, with 85% home loan exposure, is well-placed on the above. We expect the company to deliver 25% earnings CAGR for FY25-27E. We remain assertive with a BUY rating and FV of Rs1,360 (no change). Note: The above is a brief note on the company, based on the inputs of KIEresearch report dated 25111Oct, 2024, which is available onour website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamenta1. Disclaimer: http://bit.ly/2n5Ax1E https://www.kotaksecurities.oom/ksweb/research/kotak-research-reports/top-weekly-picks
