Buy Max Financial stock for 24% upside, says MOFSL; details here
Among peers, MOFSL also prefers HDFC Life for its consistent growth and strong profitability.
- Oct 4, 2025,
- Updated Oct 4, 2025 12:52 PM IST
Motilal Oswal Financial Services (MOFSL) has upgraded Max Financial Services to a ‘Buy’ rating, assigning a target price of Rs 2,000, implying an upside of 24 per cent from current levels. The brokerage highlighted robust growth prospects for the life insurance sector as India moves into the second half of FY26, underpinned by favorable demographic trends, rising insurance penetration, and policy reforms.
A key trend is the shift in product mix during Q1FY26, with ULIP share declining for major players. MOFSL states, "A product mix shift was observed in 1QFY26 towards non-linked categories, with ULIP share declining 460bp/360bp/600bp YoY for IPRU/SBILIFE/MAXFIN. MOFSL expect this trend to accentuate going forward, with interest rates declining and customers looking to lock long-term interest rates."
VNB margins improved 10-260bp YoY in Q1FY26 across private players, led by higher-yielding non-par and protection, offsetting ULIP softness. MOFSL expects this momentum to continue in 2HFY26, driven by a favorable mix, non-par/annuity accretion, and a low base, though 2QFY26 numbers may be impacted by ITC loss.
The GST waiver is improving affordability and penetration, but insurers face short-term margin pressure from ITC loss. However, the EV impact remains contained (
Max Financial Services delivered industry-leading growth in Q1FY26, with APE and VNB up 15 per cent and 32 per cent YoY, respectively. The company achieved the highest non-par savings mix (33 per cent of APE) and a sharp 260bp margin expansion to 20.1 per cent. It also saw strong bancassurance momentum (Axis Bank and new partners up over 54 per cent YoY) and continued agency expansion.
MOFSL values MAXLIFE at 2.2x FY27E EV and, adjusting for the 80 per cent stake of Max Financials, arrives at a target price of Rs 2,000. Management guides for 24-25 per cent margins in FY26, with potential upside from the reverse merger.
Among peers, MOFSL also prefers HDFC Life for its consistent growth and strong profitability (VNB margins of 25 per cent+ and RoEV of 16.3 per cent).
Looking ahead, sector performance will depend on ongoing product mix changes, regulatory adjustments, and the rate-easing cycle, with the reverse merger providing further upside for Max Financial Services and its peers.
Motilal Oswal Financial Services (MOFSL) has upgraded Max Financial Services to a ‘Buy’ rating, assigning a target price of Rs 2,000, implying an upside of 24 per cent from current levels. The brokerage highlighted robust growth prospects for the life insurance sector as India moves into the second half of FY26, underpinned by favorable demographic trends, rising insurance penetration, and policy reforms.
A key trend is the shift in product mix during Q1FY26, with ULIP share declining for major players. MOFSL states, "A product mix shift was observed in 1QFY26 towards non-linked categories, with ULIP share declining 460bp/360bp/600bp YoY for IPRU/SBILIFE/MAXFIN. MOFSL expect this trend to accentuate going forward, with interest rates declining and customers looking to lock long-term interest rates."
VNB margins improved 10-260bp YoY in Q1FY26 across private players, led by higher-yielding non-par and protection, offsetting ULIP softness. MOFSL expects this momentum to continue in 2HFY26, driven by a favorable mix, non-par/annuity accretion, and a low base, though 2QFY26 numbers may be impacted by ITC loss.
The GST waiver is improving affordability and penetration, but insurers face short-term margin pressure from ITC loss. However, the EV impact remains contained (
Max Financial Services delivered industry-leading growth in Q1FY26, with APE and VNB up 15 per cent and 32 per cent YoY, respectively. The company achieved the highest non-par savings mix (33 per cent of APE) and a sharp 260bp margin expansion to 20.1 per cent. It also saw strong bancassurance momentum (Axis Bank and new partners up over 54 per cent YoY) and continued agency expansion.
MOFSL values MAXLIFE at 2.2x FY27E EV and, adjusting for the 80 per cent stake of Max Financials, arrives at a target price of Rs 2,000. Management guides for 24-25 per cent margins in FY26, with potential upside from the reverse merger.
Among peers, MOFSL also prefers HDFC Life for its consistent growth and strong profitability (VNB margins of 25 per cent+ and RoEV of 16.3 per cent).
Looking ahead, sector performance will depend on ongoing product mix changes, regulatory adjustments, and the rate-easing cycle, with the reverse merger providing further upside for Max Financial Services and its peers.