Max Financial Services Q2 Review - Modest Business Growth; VNB Margin Expands Sharply: Motilal Oswal
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Motilal Oswal Report
Max Life reported a mixed quarter as annual premium equivalent growth remains modest, impacted by sluggish growth in protection/non-participating segment, while PAR/unit link investment plan witnessed healthy growth.
As a result, protection mix moderated over H1 FY22.
On the distribution front, the bancassurance/proprietary channel supported Max Financials' growth momentum.
Value of new business margin expanded sharply to 29.1% in Q2 FY22 (versus 19.7% in Q1 FY21), supported by improving product mix and base effect of high opex in Q1 FY22.
We expect value of new business margin to sustain at 25-26% and estimate 21% annual premium equivalent compound annual growth rate over FY21-24E.
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