Max Financial shares gain over 3% post Q4 earnings: Should you buy, hold or sell the stock?

Shares of Max Financial Services in Wednesday's (May 8) early morning deals gained up to 3 per cent to Rs 1000.45 afer the life insurance company came up with its Q4 and full-year earnings on Tuesday.

The company for the January-March period reported a consolidated net loss of Rs 44.05 crore as against a net profit of Rs 45.89 crore in the same period last year. Sales at the company grew 49.94 per cent to Rs 14,887.81 crore in the quarter ended March 2024 as against Rs 9929.37 crore during the previous quarter that ended March 2023.

Furthermore, during the reporting quarter,consolidated revenue came in at Rs 14,899 crore, an increase of 50% year-on-year. During the quarter, the new business growth was fuelled by strong growth in Retail Protection & Health, Group Credit Life and Annuity business, added the company's press release.

For the full FY24, the company's Assets Under Management (AUM) grew by 23 per cent to Rs 1,50,836 crore. New Business Margin (NBM) was at 26.5 per cent with Value of New Business at Rs 1,973 crore.

What do brokerages suggest on Max Financial after its Q4?

Despite weak Q4 show, Jefferies remains bullish on the counter and has reiterated its 'buy' call with a target of Rs 1200, implying a potential upside of nearly 24 per cent. The brokerage maintained that the company's APE or annual premium equivalent growth of 13 per cent and VNB or value of new business rise of 7 per cent were ahead of estimates. The brokerage forecasts 16 per cent CAGR in VNB over FY24-27. With valuations pegged at 1.7x FY25 P/EV, the global brokerage anticipates  favourable risk-reward.

UBS also remains bullish on the counter and continues with its 'buy' view with a target of Rs 1270. The brokerage highlighted that the company's VNB surprises positive in Q4FY24. Proprietary channel drives growth in FY24.