Max Financial Services Shares Jump 4 Percent Despite Weak Earnings

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Max Financial Services said the net profit was lowered largely due to one-time expenses for pursuing an inorganic opportunity for Max Life and reversible fair valuation impact as per IndAS.

Shares of Max Financial Services jumped over 4% in intraday trade on Thursday despite the company reporting a 30% fall in consolidated net profit to Rs 391 crore for 2018-19.

Max Financial Services said in a release that net profit was lower largely due to one-time expenses for pursuing an inorganic opportunity for Max Life and reversible fair valuation impact as per the recently adopted accounting methodology IndAS. The company’s consolidated revenue grew 17% to Rs 17,538 crore as compared to the year-ago period, it said.

However, Max Financial Services reported a stand-alone net loss of Rs 109.62 crore for the quarter ended March as against net loss of Rs 14.54 crore during the year-ago quarter. For the full year, stand-alone net profit declined 65.68% to Rs 49.39 crore during the March quarter as against Rs 143.93 crore during the previous year ended March 2018.

Max Financial Services’ sole operating subsidiary Max Life Insurance also achieved an important milestone this year with its assets under management (AUM) crossing the Rs 60,000 crore mark for the first time. Max Life’s AUM as on 31 March 2019 stood at Rs 62,798 crore, growing 20% over the previous year.

Max Financial Services said new business premium of Max Life grew 22% to Rs 3,950 crore during the fiscal year ended March 2019.

Mohit Talwar, vice chairman at Max Group and managing director at Max Financial Services, said, “With an increase of 65 basis points compared to last year, Max Life now commands approximately 10% of the private market share in the life insurance sector. This is a testimony to the company’s strong and consistent performance trajectory over the years. I am happy to report that in FY19 Max Life has clocked a 22-22-22 growth in Value of New Business, Margin and Return on Embedded Value, which sets it well on way to achieve 25-25-25 growth in these parameters by 2022.”

Max Financial Services, a part of the $3 billion Max Group, is the parent company of Max Life, India’s largest non-bank, private life insurance company. At 12:33pm, shares of Max Financial Services were trading at Rs 455.30, up 3.4%, on BSE.