Max Financial Revenue Up 18%, VNB Surges 30%, But Profit Faces Headwinds

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AuthorAkshat Lakshkar|Published at:
Max Financial Revenue Up 18%, VNB Surges 30%, But Profit Faces Headwinds
Overview

Max Financial Services Limited (MFSL) reported an 18% YoY rise in revenue (ex-investment income) to ₹24,625 crore for 9M FY26, propelled by its subsidiary Axis Max Life Insurance's 18% Gross Written Premium (GWP) growth to ₹25,195 crore. Axis Max Life's Value of New Business (VNB) surged 30% to ₹1,633 crore, with New Business Margin improving to 23.6%. However, Profit Before Tax (PBT) for Axis Max Life declined to ₹248 crore from ₹397 crore, and the policyholder expense ratio rose to 15.8%, impacting profitability.

Max Financial Services Navigates Growth Amidst Profitability Concerns

Max Financial Services Limited (MFSL) has posted a mixed financial performance for the nine months ended December 2025 (9M FY26), showcasing strong top-line expansion driven by its insurance arm, Axis Max Life Insurance, while grappling with a decline in profitability.

📉 The Financial Deep Dive

The Numbers:

  • Consolidated Revenue (incl. investment income) for 9M FY26 stood at ₹36,891 crore, an 8% year-on-year increase.
  • Excluding investment income, MFSL's revenue grew by a more robust 18% to ₹24,625 crore in 9M FY26.
  • Axis Max Life Insurance reported Gross Written Premium (GWP) of ₹25,195 crore, up 18% YoY.
  • Annualised Premium Equivalent (APE) for Axis Max Life grew by approximately 20.5% to ₹6,908 crore.
  • The Value of New Business (VNB) demonstrated significant growth, increasing by 30% year-on-year to ₹1,633 crore in 9M FY26. For the third quarter (Q3 FY26) alone, VNB grew 35% YoY to ₹659 crore.
  • The New Business Margin (NBM) improved to 23.6% in 9M FY26 from 21.9% in the prior year, and further to 24.1% in Q3 FY26.
  • The Embedded Value (EV) of Axis Max Life reached ₹28,110 crore as of December 2025, reflecting a 16.5% increase from the previous year.
  • However, Profit Before Tax (PBT) for Axis Max Life saw a significant decline, falling to ₹248 crore in 9M FY26 from ₹397 crore in 9M FY25.
  • The Operating Return on Embedded Value (RoEV) also experienced a marginal decrease to 16.9% from 17.3%.
  • The Policyholder Opex to GWP ratio increased to 15.8% from 14.9%, attributed to GST implications and a one-off impact from the Labor Code.

The Quality:

While the growth in premiums, APE, and VNB signals strong business momentum and improving operational efficiency as evidenced by the higher NBM, the drop in PBT and the increase in the Opex ratio are key concerns for investors. The company attributes these increases to external factors like GST and regulatory changes (Labor Code), but sustained margin pressure could impact future profitability. The robust growth in Retail Protection and Health APE (up 57%) and Annuity APE (up 107%) highlights successful product strategies in high-growth segments. The solvency ratio remains strong at 201%, providing a stable financial foundation.

Segmental Performance:

Axis Max Life showcased strong traction in specific segments. Retail Protection and Health APE surged by 57% to ₹933 crore, while Annuity APE saw a remarkable 107% increase to ₹630 crore during 9M FY26. The company's proprietary channels also performed well, with APE increasing by 29% year-on-year. The partnerships channel contributed 5% of Individual APE with approximately 100% year-on-year growth, bolstered by the onboarding of 51 new partners.

🚩 Risks & Outlook

Specific Risks:

The primary risks for MFSL lie in its ability to translate strong top-line growth into consistent bottom-line profitability. The rising expense ratio and the decline in PBT require careful monitoring. The company's reliance on Axis Max Life means any challenges faced by the subsidiary directly impact MFSL's overall performance.

The Forward View:

MFSL and Axis Max Life are focused on their strategic pillars: driving margins through product innovation, ensuring sustainable growth, and enhancing customer centricity. Digitization remains a key enabler for operational efficiency and data-driven insights. Investors will be watching how effectively the company manages its cost structure while sustaining its growth trajectory in the coming quarters, particularly in light of the recent PBT decline and increased operating expenses.

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