{"id":1048,"date":"2019-11-07T20:08:00","date_gmt":"2019-11-07T20:08:00","guid":{"rendered":"http:\/\/oscillationss.blogspot.com\/?p=1048"},"modified":"2019-11-07T20:08:00","modified_gmt":"2019-11-07T20:08:00","slug":"max-india-ltd-and-max-financial-updates","status":"publish","type":"post","link":"https:\/\/oscillations.in\/?p=1048","title":{"rendered":"Max India ltd and Max Financial-Updates"},"content":{"rendered":"
\n<\/p>\n
\nDear All, Max India has run up
\nquite well after our recent entry at 56 in Aug-19 (click here<\/a> for previous post on Max group).It is trading around 80 so
\ngood 50% growth in last 2 months but if you ask me it is just the start. <\/div>\n
\n<\/div>\n
\nHealthcare
\nBusiness: <\/span><\/u><\/b>As shared in the last post on Max India, I am a great
\nadmirer of this man Abhay Soi the current chairman of Max Healthcare and I have
\nvery high expectations from him. And by looking at this quarter results he has
\njust proved his mettle. They have given stunning set of numbers. Max healthcare
\nrevenue grows 13% to 753 cr vs 664 cr. But the star performer is the EBITDA
\nmargins which have grown 79% to 116 cr vs 65 cr last year. EBITDA margins are
\nat 15.4% an improvement of 4.36%. Net profit is at 30 cr vs loss of 7 cr last
\nyear. So this is a great turnaround and looks like Abhai soi is straight on the
\ntask. He is a champion in turnarounds and revivals\u2026a master in cost rationalization
\nand improvement in efficiency. <\/div>\n
\n<\/div>\n
\nI do not have the numbers for
\nmatured and new hospitals of max healthcare because for Apollo Hospitals the
\nEBITDA margin of matured hospitals is around 22% but for the whole business the
\nsame is around 14% so Max healthcare is doing fine although there is still
\nimmense scope for growth because current phase is just the start of
\nrestructuring post-merger with Radiant life.<\/div>\n
\n<\/div>\n
\nReal
\nestate business-<\/span><\/u><\/b> <\/span>As I have
\nshared earlier real estate is going to be the next focus area for the group and
\nI am expecting high activity in this sector from the group. Like for Max
\nVenture, I am eagerly waiting for some news regarding acquisition of some
\ndistressed realty project by Max Estates. I think that very soon we\u2019ll see the heightened
\nactivity in real estate as distressed real estate developers will run for
\nshelter to much better players like Max group. Banks will start pressing for
\nloan repayments now as they have almost cleaned and provided for the
\ninfrastructure NPA\u2019s and next segment is real estate where I think the quantum
\nof distress will be less because at good prices real estate still is capable of
\ngenerating high demand as compared to distressed assets in the form of Road,
\npower and steel plants.<\/div>\n
\n<\/div>\n
\nMax
\nFinanacial Services:<\/span><\/u><\/b> Max Fin is also doing good and touched 480
\nfrom 400 levels. As I have shared earlier this one is grossly undervalued. Max
\nlife is the brainchild of Analjit singh and he has transformed this one into
\none of the best professionally managed insurance company with very strong
\nethics. They still have one of the most productive and well trained agency
\nnetwork and this is going to be a critical factor because Max Life is looking
\nto grow their pure protection business (term plan) where bancassurance has very
\nlittle impact. Bancassurance is best suited for ULIPs where ticket size is higher
\nnot for term plans. But term plans are the best for life insurance business as
\nthey are simpler and high margin products and Max India is at 2nd<\/sup>
\nnumber with 17% share of term plans out of its total premium income. HDFC is at
\nthe first\u2026the likes of SBI and ICICI are much behind and they are mainly ULIP
\nplayers the demand for which is fading away and that\u2019s why I feel in no case
\nSBI life should get so much higher valuations than Max life.<\/div>\n
\n<\/div>\n
\nEarlier i made 5-6 times gain in
\nthe erstwhile max India which I sold in 2016. But after that it has almost
\ndoubled its premium income and but trading at much lower price and the major
\nreason as I have explained earlier is pledged holding of Analjit singh (some
\n80-90%). But as i have explained in the earlier Post the debt of analjit singh
\nis against real estate assets and he may choose to sell his stake in max Life
\nor some real estate assets although as per the news reports he is looking to
\nsell 10% stake in Max Life and I think with this debt issues will be resolved.<\/div>\n
\n<\/div>\n
\nBut one thing, Analjit singh has
\nchosen to part away his holding in Life insurance business but have not opted
\nto sell his real estate assets which clearly shows his priorities at present
\nand that\u2019s why I feel that he is going to do something big in real estate.<\/div>\n
\n<\/div>\n
\nComing back to Max Life, apart
\nfrom stake sale and pledged share issue the next big trigger is investment by Axis
\nbank which is looking to establish its own insurance business. Axis bank holds
\n2.99% in Max life at present. I think Analjit singh may even sell his 10% stake
\nto Axis bank although as per media reports Munjal family is in the fray. <\/div>\n
\n<\/div>\n
\nBut still Max Fin is trading very
\ncheap. As I have shared in the previous post, at that time its market value was
\naround 10000 cr which means it was trading at 1.6 times (now around 2) of its
\nEmbedded value (EV) which in my view was extremely low for a highly efficient
\nand reputed life insurance player. SBI Life trades at 5 times its EV and HDFC
\nat some 20 times. Last year both SBI Life and Max Fin were trading at 3 times
\nEV so one can see the gross undervaluation. Could not get time to study the results of Max Fin but I am planning to post a detailed study on max Financial soon. <\/div>\n
\n<\/div>\n
\nSo I think both Max India and Max
\nFinancial are still worthy for investing money but I also feel that this may be
\nthe last opportunity to pick both at these levels.<\/div>\n
\n<\/div>\n
\n (Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the shares discussed in this Post).<\/span><\/div>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Dear All, Max India has run up quite well after our recent entry at 56 in Aug-19 (click here for previous post on Max group).It is trading around 80 so good 50% growth in last 2 months but if you ask me it is just the start. Healthcare Business: As shared in the last post on Max India, I am a great admirer of this man Abhay Soi the current chairman of Max Healthcare and I have very high expectations from him. And by looking at this quarter results he has just proved his mettle. They have given stunning set…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1048","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts\/1048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1048"}],"version-history":[{"count":0,"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts\/1048\/revisions"}],"wp:attachment":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}