Max Financial Services hits 52-week high on strong Q1 nos, further stake purchase by Axis Bank

Shares of Max Financial Services zoomed over 12 per cent and hit a 52-week high on the BSE at Rs 885.9 apiece in Thursday's trading session. Dalal Street showed buying interest in the stock after the company released its June quarter (Q1 FY24) numbers and informed bourses that Axis Bank will buy an additional seven per cent stake in Max Life, a material subsidiary of Max Financial Services.

At the time of filing this report, around 12:45 pm, Max Financial Services stock traded at Rs 874.5 apiece, up 10.72 per cent or Rs 84.7 on the bourse. The scrip recovered all of Wednesday's trading losses. The market capitalisation of the company stood at Rs 30,180.29 crore.

How did the company perform in Q1?

The company's consolidated profit after tax (PAT) came in at Rs 101 crore against Rs 68 crore logged in the year-ago period, up 48 per cent year-on-year (YoY), according to the regulatory filing.

Max Financial Services' margins during the quarter expanded from 21.3 per cent, a year earlier to 22.2 per cent, and the value of new business grew by 16 per cent year-on-year (YoY) to Rs 247 crore.

Assets under management (AUM) of the company grew by 20.5 per cent to Rs 129 lakh crore against Rs 1.07 lakh crore in the year-ago period. 

Apart from this, the board of Max Financial Services and Max Life has approved Axis Bank's proposal to infuse Rs 1,612 crore by subscribing to 14.26 crore equity shares of Max Life at a fair market value of Rs 113.06 per share. Upon completion of the proposed infusion, Axis entities will collectively hold 19.02 per cent of the equity share capital of Max Life.

This capital infusion will help Max Life support its future growth ambitions, augment its capital position, and improve solvency margins.

Brokerages' views 

Global brokerages are bullish on the company after its strong Q1 performance.

CLSA has maintained a 'buy' with a target price of Rs 1025 apiece, which implies an upside of 29.8 per cent from Wednesday's closing price.

Jefferies has also maintained a 'buy' for a target of Rs 800 apiece, which translates to an upside of 1.3 per cent from Wednesday's closing price.

Max Financial Services share price: Past performance 

The stock has gained over 27 per cent in 2023 so far, against Nifty's rise of over seven per cent.

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