JPMorgan has initiated coverage on Max Financial Services Ltd. with an 'overweight' rating and a price target of ₹2,170 per share, as reported by CNBC TV18. The brokerage noted that shares have upside potential of 27% based on current market conditions. This marks JPMorgan's entry into the life insurance sector coverage, joining the consensus of optimism among analysts covering the stock.
According to CNBC TV18, all 29 analysts covering Max Financial Services have 'buy' or 'overweight' ratings on the stock. JPMorgan stated in its initiation note that given the sharp decline in respective stock prices, it has initiated coverage with 'overweight' recommendations even on Max Financial's peers, including SBI Life, HDFC Life, ICICI Prudential Life Insurance Corp and LIC.
As reported by CNBC TV18, JPMorgan said India's life insurance sector is turning the corner with GST exemption driving a strong uptick in retail protection. Individual life and health insurance policies in India became officially GST-free from September 22, 2025, eliminating the previous 18% GST levied on most individual insurance premiums. This change has reduced costs for policyholders and encouraged wider adoption of insurance products. Analysts forecast the sector's Value of New Business (VNB) to grow annually by 13-19% from fiscal years 2026 to 2028.
Despite strong revenue growth, Max Financial's high valuation raises sustainability concerns with a P/E ratio near 229, significantly higher than peers like SBI Life (77.32) and HDFC Life (74.62). The company's Q3 FY26 results highlight profitability challenges with revenue growing 60% year-on-year to ₹14,258.93 crore, but profit before tax and profit after tax dropping 38% and 36% respectively to ₹50.06 crore and ₹44.76 crore. JPMorgan expects Max Life Insurance to achieve sector-leading annual growth rates of 17% for Annualised Premium Equivalent (APE) and 19% for VNB between FY26 and FY28, though current stock valuation already prices in much of this expected growth.
According to CNBC TV18, shares of Max Financial were trading flat at ₹1,733.7 apiece around 12 pm on Wednesday. Meanwhile, shares of SBI Life, ICICI Prudential Life, and LIC were down around 1% each. JPMorgan highlighted that margins of these companies, which are at trough levels, look set to recover as protection sales rise and payout structures normalise. The brokerage identified commission reform, sustained protection growth, margin recovery and sharp gains by larger insurers as key catalysts for these stocks going forward.
