On Wed, Nov 16, 2016 at 3:47 PM, Rajesh Desai <stockdesai@gmail.com> wrote:
--Edelweis's research report on Max Financial Services Max Financial Services' (MFS; holding company for life insurance) Q2FY17 performance held it in good stead. Growth momentum in life insurance business sustained (broadly in line with industry) and continued to deliver across critical business metrics—persistency, healthy AUM accretion and stable expense ratio. Further, MFS will merge with HDFC Life pursuant to various approvals. We believe the merged entity will emerge stronger and operating leverage benefits will help it achieve even better RoEVs (refer our note, "Life Insurance: Coming off age" dated September 12, 2016). Maintain 'BUY'. The merged entity, with its unparalleled distribution network and strong complementary product mix, will be an enviable franchise. Factoring in potential synergistic benefits, we have valued the entity at INR 769 bn. These valuations and MFS' economic interests translates into TP of INR 616. The combo remains the best business to own from compounding story perspective given best‐in‐class RoEV. Maintain 'BUY/SP'.--
CA. Rajesh Desai
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CA. Rajesh Desai
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