9 February 2021
3QFY21 Results Update | Sector: Financials
MAX Financial Services
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E MARCH
Net Premiums
Surplus / Deficit
Sh.PAT
NBP gr - unwtd (%)
NBP gr - APE (%)
Premium gr (%)
VNB margin (%)
Op. RoEV (%)
Total AUMs (INRb)
VNB(INRb)
EV per Share
Valuations
P/EV (x)
P/EVOP (x)
FY20 FY21E FY22E
161.8 181.2 204.5
12.9
10.3
8.3
5.4
6.3
7.1
8.2
14.0
16.0
5.9
12.3
15.7
11.0
11.9
12.9
21.6
25.1
24.5
20.3
21.0
20.3
684.7 865.0 916.9
9.0
11.9
13.5
209.7 273.2 322.1
4.4
21.9
3.4
19.0
2.9
16.7
MAXF IN
345
254.6 / 3.5
752 / 280
-4/3/29
1181
CMP: INR738
TP: INR860 (+17%)
VNB margin buoyant; Non-PAR growth remains robust
Buy
Growth momentum reviving in the proprietary channel
MAX Life Insurance (MAXLIFE) has demonstrated a resilient performance
amid a challenging macro environment, with 21% APE growth, led by robust
growth in Non-PAR savings and a recovery in ULIP. After witnessing robust
Protection growth over 1HFY21, the same has moderated during 3Q.
Shareholders’ PAT grew at 43% YoY during 3QFY21.
Absolute VNB growth stood robust (65% YoY), led by a VNB margin of
28.6%. This has been supported by robust trends in Non-PAR savings and
cost improvement. Strong push via the bancassurance channel has aided
premium growth, while proprietary channel is also showing a recovery.
We expect 16% CAGR in APE growth over FY20-23E, while VNB margin
remains ~24%. This would enable 21% VNB CAGR over FY20-23E, while
operating RoEV sustains ~20%.
Maintain Buy.
VNB margin buoyant; APE grows 21% YoY
Shareholding pattern (%)
As On
Dec-20 Sep-20
Promoter
17.3
22.3
DII
50.9
30.4
FII
19.7
32.4
Others
12.2
14.9
FII Includes depository receipts
Dec-19
28.3
31.5
27.7
12.5
Gross premium income grew ~19% YoY, led by a 20%/36% growth in the
first year/single premium. Renewal premium grew ~16% YoY. Shareholders’
PAT in 3QFY21 grew by 43% YoY to ~INR2.2b.
In 3QFY21, Individual APE grew at 21% YoY and thus, total APE growth also
stood at 21% YoY, aided by strong trends in the Non-PAR savings (118% YoY)
with the launch of new products, while ULIP saw a recovery (8% YoY).
Protection growth moderated to 17% YoY during 3Q after witnessing robust
growth in 1HFY21 (50% YoY). The share of Non-PAR savings increased to 36%
v/s 20% in 3QFY20 (33% in 9MFY21 v/s 20% in 9MFY20). The share of
Protection stood at 12% in 3QFY21 v/s 17% in 2Q (16% in 9M v/s 20% in 1H).
Absolute VNB growth stood at 65% YoY, led by buoyant (28.6%) margin.
This was supported by strong trends in the Non-PAR segment. In 9MFY21,
VNB grew at 37% YoY, aided by business mix change towards high margin
products. VNB margin improved sharply (490bp YoY) to 25.9%.
During 3QFY21, death claims have seen a sharp rise on account of COVID
intimations, with the highest seen in Oct’20. Total death claims increased to
10,525 (v/s 7,313 in 3QFY20). We have seen a similar rise in death claims in
HDFCLIFE as well. Both managements guided at declining trends in claims
intimations from Nov’20 onwards.
On a sequential basis, persistency trends stood stable with 13th month
persistency at 83%, while 61st month persistency improved 100bp to 54%.
On a YoY basis, persistency is still lower with 13th/25th month declining
200bp/300bp to 83%/69%.
On the distribution side, banca APE reported robust trends and grew at 29%
YoY, while proprietary channel APE witnessed a gradual recovery at 9%
during 3QFY21 (v/s a 4% decline in 2Q). Thus, the share of banca improved
to 69% in 9MFY21 (v/s 67% in 9MFY20) while the share of proprietary stood
at 30% in 9MFY21.
On the cost front, opex-to-GWP ratio declined to 21.7% over 9MFY21 (v/s
22.7% in 9MFY20).
Research Analyst: Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com) |
Himanshu Taluja
(Himanshu.Taluja@motilaloswal.com)
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com);
Yash Agarwal
(Yash.Agarwal@motilaloswal.com)
Y
Investors
are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
MAX Financial Services
Valuation and view
MAXLIFE reported strong trends in the Non-PAR segment, while ULIP showed a
recovery. VNB margin has improved sharply to ~25.9% in 9MFY21 (490bp YoY
improvement). Strong push via the bancassurance channel has supported premium
growth, while the proprietary channel is also recovering. With increasing focus
towards high margin products and productivity improvements, we estimate APE
growth at 16% CAGR over FY20-23E, while VNB margin will sustain ~24% in FY23E.
This would enable 21% VNB CAGR over FY20-23E, while operating RoEV will sustain
~20%, with embedded value (EV) reflecting 18% CAGR over FY20-23E. The stock will
continue to re-rate if the AXSB-MAXLIFE deal goes through and both entities forge a
long term strategic partnership. We maintain our BUY rating with a TP of
INR860/share (2.8x FY23E EV).
Quarterly performance
(INR m)
Gross premium income
Growth (%)
PAT
Growth (%)
Key metrics (INR m)
New Business APE
VNB
AUM (INR b)
Key Ratios (%)
VNB Margin (%)
Solvency ratio (%)
E: MOFSL estimates
1Q
26,510
14.3%
680
NA
6,850
1,340
640
19.6
225.0
FY20
2Q
3Q
37,810
38,800
14.6%
12.8%
860
1,540
NA
NA
10,450
2,300
650
22.0
224.0
10,100
2,120
686
21.0
220.0
4Q
58,710
6.4%
2,314
NA
14,090
3,210
685
22.8
207.0
1Q
27,510
3.8%
1,710
151.5%
6,610
1,130
730
17.1
212.0
FY21
2Q
3Q
45,330
46,280
19.9%
19.3%
260
2,200
-69.8%
42.9%
11,540
3,250
780
28.2
207.0
12,250
3,500
850
28.6
208.0
4QE
62,041
5.7%
2,126
-8.1%
17,211
4,069
865
23.6
208.8
FY20
1,61,830
11.0%
5,394
-3.1%
41,490
8,970
685
21.6
207.0
(INR m)
FY21E
1,81,161
11.9%
6,296
16.7%
47,611
11,949
810
25.1
208.8
9 February 2021
2
 Motilal Oswal Financial Services
MAX Financial Services
Exhibit 1: Quarterly snapshot
Policyholder A/c (INR b)
1Q
23.2
5.4
15.5
2.3
NA
2Q
33.0
8.5
21.6
3.0
NA
FY19
3Q
34.4
8.7
22.5
3.3
NA
FY20
4Q
55.2
16.3
34.6
4.3
NA
1Q
26.5
6.5
17.4
2.7
0.7
2Q
37.8
10.5
24.0
3.3
0.9
3.1
0.7
0.7
2.4
3.5
29.7
7.0
6.3
23.3
33.7
33
66
3Q
38.8
10.0
24.8
4.0
1.5
2.9
1.0
0.4
2.0
4.1
28.3
9.7
4.3
20.0
40.4
30
69
4Q
58.7
13.9
39.8
5.0
2.3
4.2
1.1
0.4
2.0
5.6
30.0
8.0
3.1
14.1
39.9
29
70
1Q
27.5
6.2
18.5
2.8
1.7
1.5
0.9
0.7
1.2
2.3
22.0
14.0
11.0
18.0
35.0
37
62
FY21
2Q
45.3
11.3
29.4
4.7
0.3
1.6
1.3
0.7
4.4
3.3
14.1
10.9
6.3
38.4
28.7
28
71
3Q
46.3
12.0
28.8
5.5
2.2
2.1
0.9
0.4
4.4
4.4
17.0
7.0
3.0
36.0
36.0
27
72
Change
YoY
QoQ
19
2
20
6
16
-2
36
18
43
746
-27
28
-12
-31
-14
-49
118
-1
8
33
Change (bp)
-1,129 286
-268
-382
-125
-324
1,596 -248
-446
725
-325
325
-113
110
Gross premium
First year premium
Renewal premium
Single premium
Shareholders PAT
APE data (INR b)
PAR
2.1
3.7
3.8
6.2
2.3
Individual Protection
0.4
0.6
0.4
1.0
0.5
Group Protection
0.5
0.5
0.2
0.4
0.5
Non-PAR Savings
0.3
0.4
0.7
2.2
1.0
ULIP
2.3
3.5
3.3
7.4
2.5
APE (% of total)
PAR
38.0 42.9
43.6
37.2
33.0
Individual Protection
7.0
7.0
4.4
6.0
7.0
Group Protection
9.0
5.7
1.7
2.6
8.0
Non-PAR Savings
5.0
5.0
7.6
13.1
15.0
ULIP
41.0 41.0
38.4
44.8
37.0
Distribution mix (%)
Proprietary
35
33
31
23
33
Banca
64
66
68
76
66
Key Ratios (%)
Operating ratios
Opex to GWP ratio (%)
23.6 21.3
21.1
20.0
24.7
Solvency Ratio
262.0 262.0 239.0 242.0
225.0
Profitability ratios
VNB margin
18.1 21.9
20.2
23.5
19.6
Persistency ratios
13th Month
82.0 84.0
84.0
83.0
85.0
25th Month
72.0 72.0
72.0
71.0
72.0
37th Month
64.0 65.0
65.0
64.0
64.0
49th Month
57.0 56.0
57.0
58.0
60.0
61st Month
54.0 54.0
55.0
53.0
53.0
Key Metrics (INR b)
VNB
1.0
1.9
1.8
3.9
1.3
EV
76
78
83
89
93
AUM
539
561
584
628
640
Equity Mix (%)
22.0 21.0
21.0
22.0
21.0
Please note: Persistency ratios, opex ratio and EV for 1H, 9M and 12M
23.0
224.0
22.0
85.0
72.0
65.0
60.0
53.0
2.3
97
650
21.0
22.7
220.0
21.0
85.0
72.0
63.0
60.0
51.0
2.1
101
686
22.0
20.8
207.0
22.8
83.0
71.0
63.0
59.0
52.0
3.2
100
685
17.0
21.9
212.0
17.1
82.0
68.0
61.0
57.0
52.0
1.1
107
730
20.8
21.6
207.0
28.2
83.0
69.0
61.0
58.0
53.0
3.3
110
780
21.0
21.7
208.0
28.6
83.0
69.0
61.0
57.0
54.0
-100
-1,200
758
-200
-300
-200
-300
300
10
100
41
0
0
0
-100
100
3.5
65
8
117
16
6
850
24
9
23.1
107
207
Source: MOFSL, Company
9 February 2021
3
 Motilal Oswal Financial Services
MAX Financial Services
Key exhibits
Exhibit 2: Share of Non-PAR savings improves to 33% in
9MFY21
PAR
30%
9%
4%
3%
Exhibit 3: VNB margin improves to ~25.9%, similar to
IPRULIFE levels
ULIP
FY19
FY20
9MFY21
Indi Protection
Group Protection
42%
9%
38%
18%
5%
8%
Non-PAR
37%
41%
8%
33%
4%4%
4%
6%
20%
6%
8%
33%
6%
10%
54%
43%
40%
30%
FY20
30%
9MFY20
17%
9MFY21
SBI LIFE
HDFC LIFE
IPRU LIFE
MAX LIFE
FY17
FY18
FY19
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 4: Opex to GWP ratio at 21.7% (up 100bp YoY)
Policyholder Cost to GWP Ratio (%)
23.5%
22.7%
21.7%
20.8%
20.0%
20.0%
Exhibit 5: Share of Banca channel at 69%
Proprietary
1.0%
67.0%
1.0%
71.0%
1.0%
72.0%
Banca
1.0%
70.0%
Others
1.0%
67.0%
1.0%
69.0%
1.0%
68.0%
32.0%
28.0%
27.0%
29.0%
31.0%
32.0%
30.0%
Source: MOFSL, Company
Source: MOFSL, Company
Valuation and view
MAXLIFE has increased its focus on Non-PAR and Protection segments, the share
of which has increased to ~31% in FY20 from ~16% in FY17 as Protection/Non-
PAR savings grew by 45%/46% CAGR over FY17-20.
The company has one of the most productive agency channels, with an
improvement in agent productivity to INR250k in FY20 (v/s INR150k in FY17).
The proprietary channel accounted for 30% of total APE, growing 19% CAGR
over FY17-20 v/s 16% CAGR in total APE. The management will continue to
make significant investment in growing its proprietary channel.
The deal with Axis Bank (AXSB) would create a strategic partnership and
increase visibility for long-term business growth via higher cross-sell
opportunities. The proposal has received CCI approval and is now awaiting
IRDAI’s clearance.
Buy with a Target Price of INR860:
MAXLIFE reported strong trends in the Non-
PAR segment, while ULIP showed a recovery. VNB margin has improved sharply
to ~25.9% in 9MFY21 (490bp YoY improvement). Strong push via the
bancassurance channel has supported premium growth, while the proprietary
channel is also recovering. With increasing focus towards high margin products
and productivity improvements, we estimate APE growth at 16% CAGR over
9 February 2021
4
 Motilal Oswal Financial Services
MAX Financial Services
FY20-23E, while VNB margin will sustain ~24% in FY23E. This would enable 21%
VNB CAGR over FY20-23E, while operating RoEV will sustain ~20%, with
embedded value (EV) reflecting 18% CAGR over FY20-23E. The stock will
continue to re-rate if the AXSB-MAXLIFE deal goes through and both entities
forge a long term strategic partnership. We maintain our BUY rating with a TP of
INR860/share (2.8x FY23E EV).
Exhibit 6: Raise our FY22E/FY23E PAT and VNB estimate by 15%/6% and 24.5%/24.2%, respectively
Technical Account (INR b)
Net Premiums
Investment income
Total income
Commission
Operating expenses
Surplus/Deficit
Shareholder's Account
Total Income
Total Expenses
PBT
PAT
Key Metrics
VNB (INR b)
EV (INR b)
Key Ratios
VNB margin (%)
Op. RoEV (%)
RoEV (%)
FY21E
177.0
46.4
224.1
12.0
25.5
6.1
6.3
0.3
6.0
5.3
10.8
116.7
23.2
19.9
17.0
FY22E
198.7
53.3
252.8
13.4
28.4
6.8
7.4
0.4
7.0
6.2
12.5
136.7
23.3
19.6
17.2
FY23E
225.7
58.6
285.3
15.1
32.2
8.7
9.0
0.4
8.6
7.6
14.9
160.7
23.5
19.5
17.5
FY21E
178.1
46.4
225.2
12.0
25.7
10.3
7.4
0.3
7.1
6.3
11.9
117.8
25.1
21.0
18.1
Revised Est.
FY22E
201.2
53.3
255.3
13.5
28.8
8.3
8.4
0.4
8.0
7.1
13.5
138.9
24.5
20.3
17.9
FY23E
230.2
58.6
289.8
15.5
32.9
10.1
9.5
0.4
9.1
8.1
15.8
164.0
24.2
20.0
18.1
Estimates Chg
FY21E
FY22E
FY23E
0.6
1.3
2.0
0.0
0.0
0.0
0.5
1.0
1.6
0.6
1.3
2.0
0.7
1.3
2.0
69.4
21.5
15.6
17.2
0.0
18.1
18.1
10.3
1.0
14.0
0.0
14.7
14.7
7.7
1.6
5.4
0.0
5.6
5.6
6.5
2.1
8.4
4.9
2.9
5.6
3.6
2.6
6.6
4.3
3.1
Source: MOFSL, Company
Exhibit 7: Value MAXLIFE at INR860 per share
Appraisal value method (INR b)
Embedded value
New business profit
Appraisal value
MFS stake post deal
MFS valuation per share (INR)
Appraisal value-to-embedded value (x)
Holding company discount
Target price (INR)
Implied multiples
- VNB multiple (x)
Upside
FY23E
164
15.8
464
80%
1,075
2.8
20%
860
18.9
19%
Source: MOFSL
9 February 2021
5
 Motilal Oswal Financial Services
MAX Financial Services
Story in charts
Exhibit 8: First-year premium grew 19% YoY in 3QFY21
Regular Premium YoY (%)
40%
20%
0%
-20%
13%
Tot. Premium Income YoY (%)
18%
12%
11%
10%
6%
Exhibit 9: Renewal premium up 16% YoY in 3QFY21
Renewal Premium YoY (%)
22%
15%
16%
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 10: Proprietary channel APE grew 4% YoY in 9MFY21
Proprietary Channels New Business (APE) (INRb)
11.6
6.5
7.5
8.9
12.8
Grew at
4% YoY
Exhibit 11: Banca APE rose at 15% YoY (vs total APE at 11%
YoY in 9MFY21
Banca APE (INRb)
27.6
23.4
18.8
18.3
28.4
Grew at
15% YoY
21.1
8.9
9.2
14.3
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 12: Persistency trends for MAXLIFE
13th Month
83%
71%
25th Month
83%
71%
52%
61th Month
83%
69%
54%
Exhibit 13: Solvency ratio stands at 208%
Solvency Ratio (%)
53%
Source: MOFSL, Company
Source: MOFSL, Company
9 February 2021
6
 Motilal Oswal Financial Services
MAX Financial Services
Financials and valuations
Technical account (INR m)
Gross Premiums
Net Premiums
Income from Investments
Total income (A)
Commission
Operating expenses
Total commission and opex
Benefits Paid (Net)
Chg. in reserves
Total expenses (B)
(A) - (B)
Prov. for Tax
Surplus/Deficit
Shareholder's a/c (INR m)
Transfer from technical a/c
Income From Investments
Total Income
Total Expenses
PBT
Prov. for Tax
PAT
Growth
Premium (INR m) and growth (%)
New business prem. – unwtd.
New business prem. - WRP
Renewal premium
Total premium – unwtd.
New bus. growth – unwtd.
New business growth - WRP
Renewal premium growth
Total prem. growth – unwtd.
Premium mix (%)
New business – unwtd.
- Individual mix
- Group mix
New business mix - WRP
- Participating
- Non-participating
- ULIPs
Total premium mix – unwtd.
- Participating
- Non-participating
- ULIPs
Individual prem. sourcing mix (%)
Individual agents
Corporate Agents-Banks
Direct Business
Others
FY17
1,07,804
1,06,802
42,107
1,49,101
9,363
15,912
25,275
37,775
78,693
1,41,748
7,353
799
6,555
FY17
5,551
3,089
8,645
964
7,681
1,083
6,598
50%
FY17
36,664
27,485
71,140
1,07,804
27.2%
27.1%
12.3%
17.0%
FY17
90.2%
9.8%
54.9%
13.5%
31.5%
61.4%
13.7%
24.9%
FY17
25.0%
61.8%
9.7%
3.5%
FY18
1,25,009
1,23,795
37,574
1,61,715
8,929
16,098
25,027
49,466
79,043
1,53,555
8,160
1,077
7,083
FY18
3,992
2,178
6,175
24
6,152
875
5,276
-20%
FY18
43,486
33,072
81,523
1,25,009
18.6%
20.3%
14.6%
16.0%
FY18
91.6%
8.4%
44.7%
13.9%
41.4%
57.3%
14.2%
28.5%
FY18
23.6%
63.6%
10.0%
2.8%
FY19
1,45,752
1,44,184
48,643
1,93,267
9,896
19,274
29,170
57,178
97,365
1,83,730
9,536
1,299
8,237
FY19
4,402
2,177
6,604
377
6,226
662
5,564
5%
FY19
51,604
40,019
94,148
1,45,752
18.7%
21.0%
15.5%
16.6%
FY19
92.0%
8.0%
41.4%
16.4%
42.2%
53.4%
15.0%
31.5%
FY19
23.2%
63.1%
11.3%
2.5%
FY20
1,61,836
1,59,788
21,589
1,81,989
10,244
23,441
33,685
66,222
66,394
1,66,321
15,668
2,752
12,916
FY20
4,690
2,074
6,781
802
5,978
585
5,394
-3%
FY20
55,835
42,380
1,06,002
1,61,836
8.2%
5.9%
12.6%
11.0%
FY20
91.9%
8.1%
32.2%
29.6%
38.2%
49.0%
19.8%
31.2%
FY20
22.2%
61.4%
14.5%
1.8%
FY21E
1,81,161
1,78,073
46,418
2,25,205
12,039
25,672
37,711
69,149
1,06,312
2,13,186
12,019
1,717
10,302
FY21E
5,298
2,106
7,403
330
7,074
778
6,296
17%
FY21E
63,652
47,611
1,17,509
1,81,161
14.0%
12.3%
10.9%
11.9%
FY21E
91.5%
8.5%
31.6%
32.1%
36.4%
43.3%
25.1%
31.6%
FY21E
23.0%
62.0%
13.0%
2.0%
FY22E
2,04,507
2,01,170
53,324
2,55,326
13,541
28,791
42,332
82,104
1,20,610
2,45,062
10,264
1,958
8,306
FY22E
5,666
2,739
8,406
372
8,033
884
7,149
14%
FY22E
73,836
55,096
1,30,671
2,04,507
16.0%
15.7%
11.2%
12.9%
FY22E
90.5%
9.5%
32.7%
32.0%
35.4%
44.2%
23.9%
31.9%
FY22E
24.0%
62.5%
11.5%
2.0%
FY23E
2,34,074
2,30,194
58,609
2,89,774
15,452
32,897
48,349
95,442
1,33,583
2,77,391
12,383
2,291
10,092
FY23E
6,005
3,489
9,494
421
9,073
998
8,075
13%
FY23E
87,126
65,563
1,46,948
2,34,074
18.0%
19.0%
12.5%
14.5%
FY23E
90.0%
10.0%
32.5%
32.2%
35.3%
43.0%
24.3%
32.6%
FY23E
25.0%
63.0%
10.0%
2.0%
Note: EPS and EV per share adjusted for MFS stake in MAXLIFE
9 February 2021
7
 Motilal Oswal Financial Services
MAX Financial Services
Financials and valuations
Balance Sheet (INR m)
Sources of Funds
Share Capital
Reserves and Surplus
Shareholders' Funds
Policy Liabilities
Prov. for Linked Liab.
Funds For Future App.
Current liabilities and prov.
Total
Application of Funds
Shareholders’ inv.
Policyholders’ inv.
Assets to cover linked liab.
Loans
Fixed Assets
Current assets
Total
Operating ratios (%)
Investment yield
Commissions/GWP
Operating expenses/GWP
Total expense ratio
Solvency ratio
Persistency ratios (%)
13th Month
25th Month
37th Month
49th Month
61st Month
Profitability ratios (%)
New business margin (%)
RoE (%)
ROIC (%)
Operating RoEV
RoEV (%)
Valuation ratios
Total AUMs (INR b)
EPS (INR)
Value of new business (INR b)
Embedded Value (INR b)
EV Per share (INR)
P/EV (x)
P/EPS (x)
P/EVOP(x)
FY17
19,188
5,867
25,093
2,45,296
1,52,204
15,565
17,084
4,64,434
32,303
2,55,483
1,55,910
1,333
1,623
17,783
4,64,434
FY17
11.3%
8.7%
14.8%
23.4%
309%
FY17
80.0%
70.0%
60.0%
55.0%
53.0%
FY17
18.8%
29.1%
34.4%
19.9%
17.3%
FY17
444
17.9
5.0
65.9
138.5
6.7
51.5
35.5
FY18
19,188
7,702
26,989
3,10,137
1,63,050
18,655
17,841
5,49,628
32,146
3,19,238
1,70,981
2,233
1,582
23,448
5,49,628
FY18
8.3%
7.1%
12.9%
20.0%
275%
FY18
80.0%
72.0%
62.0%
57.0%
53.0%
FY18
20.2%
20.2%
20.3%
20.6%
13.9%
FY18
522
14.3
6.6
75.1
157.8
5.8
64.4
29.3
FY19
19,188
8,478
27,609
3,81,436
1,86,738
22,498
23,398
6,59,270
35,187
3,94,173
1,98,619
3,265
1,921
26,105
6,59,270
FY19
9.0%
6.8%
13.2%
20.0%
242%
FY19
83.0%
71.0%
64.0%
58.0%
53.0%
FY19
21.7%
21.7%
20.4%
21.9%
19.0%
FY19
628
15.0
8.6
89.4
187.9
4.9
61.6
24.2
FY20
19,188
6,806
25,739
4,54,807
1,74,210
30,962
20,276
7,17,724
32,581
4,60,484
1,91,642
4,264
2,187
26,566
7,17,724
FY20
3.4%
6.3%
14.5%
20.8%
207%
FY20
83.0%
71.0%
63.0%
59.0%
52.0%
FY20
21.6%
21.6%
20.2%
20.3%
11.6%
FY20
685
14.5
9.0
99.8
209.7
4.4
63.6
21.9
FY21E
19,943
9,476
29,135
5,79,978
1,94,955
4,607
23,318
8,47,452
43,985
5,64,469
2,01,224
6,525
2,559
28,691
8,47,452
FY21E
6.4%
6.6%
14.2%
20.8%
209%
FY21E
82.5%
69.0%
62.0%
57.0%
53.0%
FY21E
25.1%
25.1%
22.9%
21.0%
18.1%
FY21E
865
14.6
11.9
117.8
273.2
3.4
63.2
19.0
FY22E
19,943
6,348
25,976
6,34,771
2,52,009
2,203
25,649
9,60,819
59,379
6,44,180
2,13,297
9,983
2,994
30,986
9,60,819
FY22E
6.6%
6.6%
14.1%
20.7%
197%
FY22E
83.5%
71.0%
62.5%
58.0%
53.5%
FY22E
24.5%
24.5%
25.9%
20.3%
17.9%
FY22E
917
16.6
13.5
138.9
322.1
2.9
55.6
16.7
FY23E
19,943
3,879
23,472
6,94,233
3,19,302
3,178
28,214
10,94,646
80,162
7,36,148
2,26,095
15,274
3,503
33,465
10,94,646
FY23E
6.4%
6.6%
14.1%
20.7%
192%
FY23E
84.5%
72.0%
63.0%
58.5%
54.0%
FY23E
24.2%
24.2%
32.7%
20.0%
18.1%
FY23E
1,042
18.7
15.8
164.0
380.4
2.4
49.3
14.3
Note: Valuation ratios adjusted for MFS stake (80%) and holding company discount of 20%
9 February 2021
8
 Motilal Oswal Financial Services
MAX Financial Services
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
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available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
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http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
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buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
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any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
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For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any
brokerage and investment services provided by MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is
intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as
"major institutional investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which
this document relates is only available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration
provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange
Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a chaperoning agreement with a U.S. registered broker-
dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
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SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
9 February 2021
9
 Motilal Oswal Financial Services
MAX Financial Services
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
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document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
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regulation or which would subject MOFSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in
all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.
Neither the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost
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The person accessing this information specifically agrees to exempt MOFSL or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOFSL or any of its affiliates or employees responsible for any such
misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses, costs, damages,
expenses that may be suffered by the person
accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263;
Website
www.motilaloswal.com.CIN
no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
9 February 2021
10