Max India Ltd.|Q2FY15 First Cut Analysis | Strong performance continues… :: India Nivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->
Max India’s consolidated total revenues were ahead of our expectation at Rs 32.9
bn, up 47% yoy (down 11% qoq) as against our expectation of Rs 28.7 bn. Total
revenues includes higher investment gains of Rs 3.93 bn in Max Life insurance
which was booked in Q2FY15 as against gain of Rs 13.6 bn in Q1FY15 and loss of
Rs 2 bn in Q2FY14.
Revenue Breakup
Rs mn Q2FY15 Q2FY14 % Y o Y Q1FY15 % Q o Q
Max Life Insurance (GWP) 19370 16790 15.4 14580 32.9
Max Healthcare 4350 3490 24.6 4160 4.6
Max Bupa Health Insurance (GWP) 860 708 21.5 730 17.8
Max Specialty Films 2000 1940 3.1 1900 5.3
Investment Income / (Loss) (MLIC) 3930 ‐2010 ‐295.5 13600 ‐71.1
Other Income 2400 1422 68.8 1890 27.0
Consolidated Total Revenue 32910 22340 47.3 36860 ‐10.7
Source: Company, IndiaNivesh Research
Max Life Insurance’s gross written premium has recorded strong growth of 15%
yoy (33% qoq) to Rs 19.4 bn as against our expectation of Rs 18.3 bn. Strong growth
in Life insurance premium is driven by healthy growth in single premium and Renewal
premium of 35% and 18% yoy respectively.
Healthcare business has also delivered healthy growth of 25% yoy to Rs 4350 mn in
Q2FY15 led by increased operational beds and healthy occupancy rate. EBITDA grew
by 41% yoy to Rs 450 mn and Contribution was up 25% yoy to Rs 2.7 bn. EBITDA
margins improved to 10.3% vs 9.2% in Q2FY14 and Contribution margin was stable
at 62% yoy.
Max Bupa health Insurance’s revenues grew by 22% yoy to Rs 860 mn. Max speciality
film’s revenues grew by 3% yoy to Rs 2000.
Consolidated EBITDA was ahead of expectation at Rs 1.8 bn as against our
expectation of Rs 1.2 bn. Beat on EBITDA was led by higher than expected growth
in revenues on back of higher investment income, healthy growth in both Life
Insurance and Healthcare Business.
Profit before tax was also ahead of expectation at Rs 1170 mn, up 26% yoy (up 52%
qoq) as against our expectation of Rs 707 mn led by reasons stated above.
Valuation:
At CMP of Rs 438, Max India is trading at P/BV of 3.8x and 3.6x for FY15E and FY16E
respectively. We have a HOLD rating on the stock with target price of Rs 329. We
will revise our target price post the conference call which is scheduled for today at
3.30 PM. We had recommended buy on Max India in our report ‘Investment
strategy….Regardless of election outcome’ on 5th March 2014 at Rs 190 with target
price of Rs 274 which was achieved on 20th May 2014 and upgraded further to 329
which was also achieved.

LINK
http://www.indianivesh.in/Admin/Upload/635514663504348750_Max%20India_Q2FY15%20First%20Cut%20Analysis.pdf