The shares of Max Financial Services Ltd. (MFSL) hit fresh highs on Wednesday after the company recorded a strong performance in Q3 FY21.

At 11:40 am, the company was trading at ₹792.65 on the BSE, up ₹54.75 pr 7.42per cent. It hit a 52-week high of ₹798.75. It opened at ₹749.90 as against the previous close of ₹737.90. On the NSE, it was trading at ₹792.60, up ₹54.55 or 7.39 per cent. It hit a 52-week high of ₹798.95.

The company on Tuesday announced its financial results for the quarter ended December 31, 2020. The company recorded a consolidated Profit After Tax (PAT) ₹227 crore, up 54 per cent year-on-year in Q3. MFSL’s consolidated revenues were up 68 per cent YoY at ₹8,990 crore due to higher investment income.

Also read: Max Financial Services net up 54% in Q3

The company’s sole subsidiary Max Life reported a Gross written premium of ₹4,629 crore in the quarter, up 19 per cent over the previous year. Shareholders’ PAT rose to ₹220 crore, up 43 per cent over 2019, due to higher investment income and reserve release due to hedging of in-force Protection business.

Motilal Oswal Research, seeing further upside in the stock maintained a Buy rating with a target price of ₹860.

“Overall, with increasing focus towards high margin products and productivity improvements, we estimate APE growth at 16 per cent CAGR over FY20-23E, while VNB margin will sustain ~24 per cent in FY23E. This would enable 21 per cent VNB CAGR over FY20-23E, while operating RoEV will sustain ~20per cent, with embedded value (EV) reflecting 18per cent CAGR over FY20-23E,” it said.

Emkay Securities also maintained a Buy rating on MFSL with a target price of ₹830. “We increase our VNB margin assumptions to 26.7 per cent/27 per cent for FY22/23. We continue to like MAXL for its diversified product profile and consistency in margin improvement,” it said.

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