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Introduction & Market Context
Max Financial Services Ltd (BSE:MFSL) reported strong premium growth for the first quarter of fiscal year 2026, significantly outperforming the private insurance industry despite facing challenges in profitability. The company’s presentation, released on August 8, 2025, highlighted its expanding market share and strategic focus on high-margin segments.
Max Financial’s Axis Max Life Insurance subsidiary achieved a 23% year-over-year growth in Individual Adjusted First Year Premium (FYP), considerably outpacing the private industry’s growth of 8%. This performance helped the company expand its private market share to 10.0% during the quarter, up 121 basis points from 8.8% in the same period last year.
Quarterly Performance Highlights
The company reported revenue excluding investment income of Rs 6,194 crore, representing an 18% year-over-year increase. However, despite the strong top-line growth, Max Financial’s Profit Before Tax declined significantly by 51% to Rs 74 crore, compared to Rs 151 crore in Q1 FY’25. The consolidated Profit After Tax stood at Rs 86 crore for the quarter.
As shown in the following comprehensive performance summary:
The company’s Assets Under Management (AUM) grew by 14% to Rs 1,83,211 crore, while the renewal premium increased by 17% to Rs 3,873 crore, demonstrating strong customer retention. The solvency ratio remained healthy at 199%, though slightly down from 203% in the previous year.
Detailed Financial Analysis
A key highlight of the quarter was the 32% growth in Value of New Business (VNB) to Rs 335 crore, up from Rs 254 crore in Q1 FY’25. The New Business Margin (NBM) improved significantly to 20.1%, compared to 17.5% in the same period last year, reflecting the company’s focus on more profitable product segments.
The improvement in margins was primarily driven by strong growth in high-margin protection and annuity products. Retail Protection and Health APE grew by 36% to Rs 218 crore, while Annuity APE increased by 40% to Rs 114 crore during the quarter.
The company’s performance relative to the industry is illustrated in this chart showing market share gains:
Max Financial’s consistent growth in new business is evident in the following metrics:
The company’s focus on value creation through product mix optimization is reflected in the VNB growth:
Strategic Initiatives
Max Financial continues to execute its strategy based on four key pillars: predictable and sustainable growth, product innovation to drive margins, customer centricity, and digitization for efficiency. The company is particularly focused on expanding its distribution capabilities through both proprietary and bancassurance channels.
During Q1 FY’26, the company successfully onboarded 15 new partners, including 7 Group Credit Life partners, 7 online & offline brokers, and 1 corporate agent, strengthening its distribution network.
The company’s distribution strategy is illustrated in the following chart:
Product innovation remains a priority, with the recent launch of the Smart Value Income & Benefit Enhancer Plan (Smart VIBE), which offers instant income in the first policy year. The company continues to focus on segments with higher growth and margin potential, particularly protection, health, and annuity products.
Max Financial also highlighted its digital initiatives, including leadership in e-commerce and leveraging AI for competitive advantage. The company maintained its #1 rank in online protection and online savings segments.
Forward-Looking Statements
Looking ahead, Max Financial aims to continue its market share expansion while improving profitability. The company’s management emphasized its commitment to efficient capital management and sustainable growth, with a focus on enhancing operating return on embedded value (RoEV).
The company’s embedded value (MCEV) as of June 2025 stood at Rs 26,478 crore, representing a 20% increase from Rs 22,043 crore in the previous year. The operating RoEV for Q1 FY’26 was 14.3%, slightly higher than the 14.2% reported for Q1 FY’25.
Max Financial also highlighted its ESG initiatives and sustainability framework, which is built on four pillars: working ethically and sustainably, caring for people, financial responsibility, and green operations.
While the company’s premium growth and market share gains are impressive, investors will likely be watching closely to see if Max Financial can address the significant decline in profitability in the coming quarters. The management did not provide detailed guidance on when profit growth might resume, but the focus on higher-margin products suggests a strategic shift toward improving bottom-line performance.
Full presentation:
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