Jefferies has reiterated its buy rating on Max Financial Services Ltd with a target price of ₹1,900 per share, citing robust value of new business (VNB) growth and strong margin performance in Q2FY26.
The brokerage said VNB grew 25% year-on-year, supported by a 185-basis-point expansion in margins to 25% and annual premium equivalent (APE) growth of 16%. The company’s embedded value (EV) rose 15% year-on-year, while operating return on EV was healthy at 16%.
Jefferies attributed the margin gains to a better product mix and favourable yield curve movements. However, it noted that the 13-month persistency ratio declined 200 basis points year-on-year, which the company aims to address through improved customer retention initiatives.
While upcoming GST changes could exert pressure on margins, Jefferies said Max Financial is well positioned to navigate the transition due to its balanced product portfolio and focus on profitable growth. Trading at 12x FY27 price-to-VNB, the brokerage continues to see the stock as its top pick in the insurance sector.
Disclaimer: The views and recommendations above are those of Jefferies. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
