Max India Ltd.|Q2FY15 Result Update | Overall good show with healthy growth across businesses… maintain hold with target price of Rs 367 :: IndiaNivesh

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Max India’s Q2FY15 results were ahead of our expectation with Consolidated
revenue growing by 47% yoy led by 1) higher than expected growth in both Life
Insurance (up 15% yoy) and Healthcare business (up 25% yoy) and 2) higher
investment gains of Rs 3.93 bn as against loss of Rs 2 bn in Q2FY14. Consolidated
EBITDA was up 21% yoy to Rs 1840 mn ahead of our expectation of Rs 1241 mn.
Profit before tax on consolidated basis was at Rs 1170 mn, up 26% yoy as against
our expectation of Rs 707 mn led by higher investment gains. Stock price has moved
up by 29% / 35% in last 1 / 3 month on back of news of Insurance bill to be passed
in upcoming season in parliament. Valuation factors in all positives, hence maintain
hold with SOTP target price of Rs 367.
Result highlights:
Consolidated revenue growth ahead of estimates:
Consolidated total revenue of the Max India increased by 47% yoy (-11% qoq) to Rs
32.9 bn. Total revenues include investment gains of Rs 3.93 bn in Max Life insurance
which was booked in Q2FY15 as against Rs 13.6 bn in Q1FY15 and loss of Rs 2 bn in
Q2FY14.


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