Max Financial Services reported strong growth in its Q2 & H1 FY26 earnings call. Individual adjusted first-year premium grew by 18% in H1 FY26, outpacing the private sector’s 8% growth. The company’s private market share increased to 10.1%. Focus remains on customer centricity, digital transformation, and product innovation. The company is confident in maintaining margin guidance despite GST-related challenges. Expects continued strong performance in coming quarters.
Key Financial Performance
Max Financial Services showcased robust financial results during its Q2 & H1 FY26 earnings conference call. Key highlights include:
- Individual adjusted first year premium grew by 18% in H1 FY26, significantly higher than the private sector’s 8% growth.
- Private market share improved by 83 basis points, reaching 10.1%.
- Adjusted FYP grew by 14% in Q2 FY26, surpassing both private sector (8%) and overall industry (1%) growth.
- Embedded value reached INR26,895 crore, a year-on-year growth of 15%.
- Annualized operating ROEV stands at 16.3%.
Strategic Growth Drivers
The company’s growth strategy focuses on several key areas:
- Proprietary Channels: Agency channel expanded significantly, with agent force growing from around 61,000 in FY22 to almost 1.42 lakhs.
- Partnership Business: Continued traction, growing at 10% in Q2 in APE terms. New partnerships now contribute around 5% of individual APE.
- NRI Segment: Consistent performance, contributing about 13% of total sales.
- Product Innovation: Retail protection products led to the highest market share in H1 FY26 with a 34% growth rate. Annuity business grew by 85% in H1 FY26 and 122% in Q2 FY26.
Customer Centricity and Digitalization
Max Financial Services emphasizes customer experience and operational efficiency:
- Persistency: 13-month persistency stood at 83%, and 25-month persistency reached an all-time high of 76%.
- Net Promoter Score: Improved to 57, up from 52 at FY25 exit.
- Digital Transformation: Mobile app scaled rapidly with over 4 lakh installations within 100 days. Customer service website NPS is now at 71.
GST Impact and Mitigation
The recent GST changes have impacted margins, but the company is taking steps to mitigate the effect:
- Approximately 75% of sales were impacted in September due to GST credit disallowances, contributing to around 0.6% of margin impact in the first half.
- The GST impact is close to 300 to 350 basis points on a run rate basis.
Future Outlook
Despite challenges, Max Financial Services is confident in its ability to maintain margin guidance and deliver sustained value creation. The company expects to improve margins from the previous year and be in the range of 24% to 25%. It aims to continue outperforming the industry in growth, driven by innovation, customer centricity, and operational excellence.
Source: BSE
