Buy Max Financial Services; target of Rs 2025: Prabhudas Lilladher

What happened

Prabhudas Lilladher reiterated a BUY rating on Max Financial Services with a target price of Rs 2,025. The brokerage tweaked APE growth estimates to 15% for FY27 and 16% for FY28E and raised margin estimates to 25.5% for FY27 and FY28E.

Confirmed

Global impact / market context

A higher target price implies the analyst expects the shares to be worth more than before. The raised margin estimate means the company keeps more profit per sale, which can lift future earnings and support the valuation used to set that target.

Analyst inference

The report notes softer first-half growth and a high base later in the year, so the analyst trimmed growth assumptions. Even so, expanding protection and retirement segments plus newer partners and online sales are cited as ways to broaden distribution.

Analyst inference

What to watch

1. Watch whether APE growth reaches the trimmed 15% estimate for FY27 and 16% for FY28E, since softer H1 performance and a high base shaped those numbers. Confirmed
2. Watch whether the company expands its protection and retirement segments and adds newer partners and online channels, which management is focused on as a path to diversify distribution. Proposed
3. Watch whether the 25.5% margin estimate holds, because it relies on more sales of higher-margin products and on operating leverage, which means fixed costs spread over more sales. Analyst inference

Evidence

• Original source link unavailable