Citi has initiated coverage on Max Financial Services with a ‘Buy’ rating and a target price of ₹1,840, citing a robust product mix, diversified distribution, and strategic backing from Axis Bank as key positives for sustainable long-term growth.
The brokerage noted that while the company has reiterated its focus on reverse merging the operational business with the listed entity, some overhang remains due to regulatory uncertainties and unclear taxation implications, which have resulted in a modest holding company discount of 20%.
Citi underscored Max Financial’s balanced product strategy, with no single product type contributing more than 40% of the mix over FY2022–25. This, along with diversified distribution channels, a resilient sales engine, and improving operational efficiency, positions the company well for sustainable Return on Embedded Value (ROEV).
The partnership with Axis Bank, now post-rebranding, adds to investor confidence due to the expected stability in growth.
However, Citi also emphasized that further stability in operating releases and margin expansion—as the product mix turns favorable—will be critical triggers for a re-rating.
Despite a positive view on Max Financial, HDFC Life and SBI Life continue to remain Citi’s preferred picks in the life insurance sector.
Disclaimer: The views expressed in this article are those of the brokerage firm and do not constitute investment advice by Business Upturn. Investors are advised to consult their financial advisors before making any investment decisions.