Max Financial Services reported a 33% year-on-year increase in Value of New Business (VNB) to ₹446 crore in Q1FY27, significantly beating the CNBC-TV18 poll estimate of ₹398 crore. According to reports from CNBC TV18, the VNB margin improved substantially to 23.2% from 20.1% in the corresponding quarter last year, surpassing the poll estimate of 20.5%. The holding company of Axis Max Life Insurance demonstrated strong profitability metrics with this robust performance in the first quarter. Jefferies noted that Q1 VNB was 17% above its estimate and 10% ahead of consensus, while the VNB margin was 360 basis points above its estimate. Bernstein attributed the improvement to yield-curve movements, favourable product mix and cost optimisation, while Jefferies pointed to product mix and the yield curve as key drivers. The better-than-expected margin reflected a more favourable product mix and yield-curve benefits, with Jefferies expecting FY27 APE to rise 15% and the VNB margin to improve to 26.5%. Motilal Oswal has now joined the positive outlook, raising VNB margin estimates by 50bp/100bp for FY27/28 and expecting APE to sustain the ~16% growth trajectory.
Total Annualised Premium Equivalent (APE) rose 15% year-on-year to ₹1,922 crore from ₹1,668 crore in Q1 of the previous year, though slightly below the CNBC-TV18 poll estimate of ₹1,939 crore. As reported by CNBC TV18, retail APE stood at ₹1,810 crore in Q1FY27, in line with the poll estimate and growing 17% year-on-year from ₹1,553 crore. Axis Max Life Insurance reported a 17% year-on-year increase in Individual Adjusted First Year Premium to ₹1,810 crore, helping the insurer gain 13 basis points in private market share to 10.1%. The positive brokerage view also reflects the breadth of growth across distribution channels, with the proprietary channel growing 15% in APE, online business increasing 27%, partnership channels up 16%, and the Axis channel rising 14%. Sales growth was led by protection, annuity and participating products, while unit-linked and non-participating products were muted. According to Prabhudas Lilladher's latest research report, Q1FY27 APE grew 15% YoY led by robust growth in protection, PAR and annuity segment, with growth momentum expected to sustain in FY27E supported by continued traction in protection/annuity, increasing contribution from newer partnerships and expansion to tier 2/3 markets.
The company reported 18% year-on-year growth in consolidated revenue excluding investment income to ₹7,289 crore in 3M FY27, while consolidated revenue including investment income stood at ₹14,977 crore. According to CNBC TV18, consolidated profit after tax (PAT) rose 37% year-on-year to ₹96 crore, with total income increasing 16.8% to ₹14,977 crore. Axis Max Life's embedded value grew 15% to ₹30,415 crore with an operating return on embedded value (RoEV) of 14.9%, while assets under management (AUM) crossed the ₹2 lakh crore milestone and grew 11% during the period. The margin improvement resulted in a stronger-than-expected VNB performance, with HSBC noting that APE growth was broadly in line with expectations, but the stronger margin uplift led to a VNB beat. Prabhudas Lilladher expects APE growth estimates at 16%/17% for FY27/FY28E and retains margin estimates at 25.0%/25.1% for FY27/FY28E.
The insurer demonstrated strong growth across key product segments, with the Protection and Health business growing 44%, led by a 57% increase in riders. As reported by CNBC TV18, the Annuity business grew 116% during the quarter, reflecting the company's balanced product strategy. Axis Max Life's Group Credit Life (GCL) segment grew 57% in 3M FY27, with 45% of the GCL business sourced from partners added in the last three years. Individual new business sum assured grew 32%, while individual renewal premium increased 20% to ₹4,639 crore, taking gross written premium (GWP) to ₹7,607 crore, up 19% year-on-year. Jefferies expects Axis Max Life to deliver an 18% VNB CAGR over the next three years, supported by a projected 16% APE CAGR and around 140 basis points of margin expansion. Bernstein noted that about 70% of the margin improvement was attributed to favourable yield-curve movements, with product-mix changes and cost optimisation accounting for the rest.
Multiple brokerages have retained positive views on Max Financial following the strong Q1 performance, with target prices ranging from ₹1860 to ₹2250. Bernstein has retained an Outperform rating with a target price of ₹2080 per share, expecting the margin improvement to remain an important driver of new business profitability. HSBC maintains a Buy rating with a target price of ₹2100 per share, expecting continued diversification of the distribution network and product portfolio to support sustainable medium-term growth. Jefferies is the most positive among the three, with a Buy rating and target price of ₹2250 per share, noting that Axis Max Life's June-quarter APE and VNB growth of 15% and 33% respectively was ahead of private-sector peers. Motilal Oswal has now joined the positive outlook, recommending a buy rating with a target price of ₹1860, premised on 2x FY28E EV. The brokerage values MAXF using the Appraisal Value framework with an unchanged multiple of 1.9x FY28E P/EV, expecting growth momentum to sustain in FY27E supported by continued traction in protection/annuity, increasing contribution from newer partnerships and expansion to tier 2/3 markets.
