Max Financial Services shares hit 52-week high on Axis Bank's stake purchase, settle 9% higher. Tech analysts view

Shares of Max Financial Services Ltd rose sharply on Thursday after Axis Bank said it would raise its stake in insurer Max Life Insurance Company to 16.20 per cent from 9.99 per cent by infusing Rs 1,612 crore. Max Life Insurance is a joint venture (JV) between Max Financial Services and Axis Bank. Axis Bank along with its entities acquired a 12.99 per cent stake in Max Life in 2021 and through this new investment, they would own 19.02 per cent in the private insurer. Max Financial would hold about 80.98 per cent in the insurer. At Axis Bank's post earnings press conference last month, CEO Amitabh Chaudhry said the lender intends to stick to its plan to acquire up to 20 per cent in Max Life.

Max Financial's stock today surged 12.17 per cent to hit a 52-week high of Rs 885.90 against its previous close of Rs 789.80. It finally settled 8.53 per cent higher at Rs 857.15.

"The company reported a consolidated revenue of Rs 4,730 crore during the first quarter of the ongoing financial year 2023-24 (Q1 FY24), up 19 per cent year-on-year (YoY). Consolidated profit after tax came at Rs 101 crore, up 48 per cent YoY on account of higher investment income. During Q1 FY24, Max Life New Business Premium grew 25 per cent to Rs 1,857 crore and annualised premium equivalent (APE) moved up by 10 per cent to Rs 1,113 crore, driven by strong growth in proprietary channels," Max Financial stated in an exchange filing.

On the technical front, analysts said the stock largely looked 'bullish'. Support on the counter could be seen at Rs 835.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "The stock has witnessed a strong spurt in price-volume and has tested the critical resistance zone of Rs 875-885. A sustainable buying above the same could trigger fresh longs in the counter with the potential to re-test Rs 920-950 zone in the near period. At the same time, any failure to withhold the same could result in a cool-odd towards Rs 820-800 zone in the comparable period."

Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher, said, "The scrip has given a breakout above Rs 835 level with a positive bullish candle. A further rise is anticipated in the coming days for next targets of Rs 940 and Rs 985 levels. The Rs 835 zone would now be the support zone as of now."

Market expert Ravi Singh said, "After delivering robust Q1 financial performance, Max Financial share price may remain strong in coming weeks. The stake hike by Axis Bank has added more fuel to the rally. On technical setup, the stock is bullish on momentum indicators and may touch the levels of Rs 950 in near term."

Meanwhile, Indian equity benchmarks fell sharply today, dragged by bank, financial, consumer, pharma, auto and technology stocks. The 30-share BSE Sensex pack tanked 308 points or 0.47 per cent to close at 65,688; while the broader NSE Nifty index moved 89 points or 0.46 per cent down to settle at 19,543.

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