Max Financial Services, a non-banking financial company (NBFC), had its shares fall 2.3% to an intraday low of Rs 1,106.75 on the BSE. Max Financial shares fell after 2.37 million of the company's shares changed hands in successive block trades. The names of the buyers and sellers were not revealed.

At 12:05 a.m., Max Financial Services shares were trading 0.72 percent down, or Rs 8.15, at Rs 1,124.75 per share. Meanwhile, the company's market capitalisation at the time was Rs 38,844.39 crore, according to the Bombay Stock Exchange (BSE).  Max Financial's BSE shareholding pattern revealed that five promoters and promoter groups owned a 6.52 percent stake in the company. The public held 93.48 percent of the shares.

Max Financial Services' new business margin fell 472 basis points (bps) year on year (Y-o-Y) to 17.5% in the June quarter of fiscal year 2025 (Q1FY25), down from 22.2% in the same quarter a year ago (Q1FY24). The NBFC's Annualized Premium Equivalent (APE) increased 31 percent year on year to Rs 1,453 crore from Rs 1,113 crore the previous year.

Following a margin contraction and APE growth, Motilal Oswal increased its APE growth expectations. However, it reduced the value of new business (VNB) margin assumptions due to negative product mix trends (a larger proportion of ULIPs).

The value of new business reflects the profitability of new policies sold during the year. The brokerage rates Max Financial Services as 'Neutral' with a target price of Rs 1,030 per share. The aim is based on a 2x March 26E enterprise value (EV) and a 20% holding company discount.

Furthermore, Motilal Oswal expects that going forward, the surrender charges will reduce the company's margins by 100-200 basis points, which will be compensated by increased premium growth, new product launches, and commission restructuring.

In terms of growth, the domestic brokerage believes that banca and online channels will continue to rise strongly. Max Financial shares have increased by 22.6% over the last year, compared to the Sensex's 25.4% rise.