Shares of Max Financial Services have rebounded strongly in Wednesday's trade after hitting a 52-week low of ₹611.50 apiece on Monday. The stock had a strong start to the session, opening at ₹644.90 and kept up that momentum in the early trade, hitting an intraday high of ₹672, up by 6.7%.
At noon, the stock was trading around ₹656 apiece, up by 4.20%.
In CY22, Max Financial Services had lost 28.83% of its value, with the stock dropping steadily from ₹952.15 apiece to ₹656. However, the stock began 2023 on a solid note, gaining 23.34% in January, but it failed to extend those gains in the following months and has since corrected by 24.64%.
Despite the recent fall, the stock is still up by 127% from March 2020 lows and 40% in the last five-year period.
On January 10, Axis Bank announced that it has entered into a revised agreement with Max Financial Services to acquire the remaining 7% stake in Max Life Insurance at fair market value using the discounted cash flow method.
Brokerage firm Sharekhan said that the deal is positive for Max Financial, as it receives more money for its stake in Max Life. The promoter recently reduced the stake in Max Financial, down to 13% from 14.7%. Now higher dividends could help promoters reduce debt, it added.
Max Financial Services is building a strong franchise, characterized by a multi-channel distribution network built upon a balanced product mix. "We believe the company’s strategy to achieve a balanced product mix and focus on non-PAR savings with the protection segment will be margin accretive," said the brokerage.
The brokerage has maintained its "buy" rating on the stock with a target price of ₹1,020 apiece. Similarly, another domestic brokerage firm, HDFC Securities, also retained its "ADD" rating on the stock with a target price of ₹1,035 apiece following the company's Q3FY23 performance.
Max Financial Services Limited (MFSL) is part of India’s leading business conglomerate, Max Group. The company is primarily engaged in growing and nurturing business investments and providing management advisory services to Indian group companies.
Max Financials currently owns an 81.83% majority stake in Max Life Insurance, India’s largest non-bank life insurer and 4th largest private life insurance company.
15 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.