Max Financial Services Ltd Q1 FY2026 Concall Summary

Key Takeaways

• APE growth 15% with 32% VNB jump: Individual adjusted FYP grew 23%, nearly 3x the private sector, but the APE metric investors track rose 15% due to a ULIP base effect that management says will plateau to a 2-4% gap.
• Margin expansion is real and deliberate: New business margin expanded 260 bps to 20.1%, driven by the Smart VIBE non-par launch, rider attachment, and pricing actions that have largely neutralized the surrender regulation hit.
• Management will cap margin upside at 25%: Any margin overrun will be reinvested into growth and distribution, not dropped to the bottom line, so the guidance band of 24-25% is both a floor and a ceiling.
• Persistency is a quiet pressure point: 13th-month persistency slipped to 86%, with management citing consumer economic stress and a declining share of high-ticket policies; later cohorts are improving, but the near-term trend bears watching.
• What to watch next quarter: Whether the insurance bill reaches Parliament, the trajectory of 13th-month persistency, and any sign that e-commerce channel growth is returning after a flat quarter.

Topline Growth: The AFYP-APE Divergence

• Individual AFYP surged 23%, nearly 3x private sector growth of 8% and more than 4x overall industry growth of 5%, with a 2-year CAGR of 25% that significantly outpaces the private sector's 16%.
• APE grew 15%, and the 8-point gap to AFYP is entirely a ULIP base effect: a large book of single-premium ULIP sales in the prior year inflates AFYP but not APE. Management expects the delta to plateau at 2-4% going forward.
• Online channel was flat on APE as market volatility hit ULIP demand on the savings side; the monthly payment mode in e-commerce mechanically widens the AFYP-APE gap in that channel.
• Offline proprietary channel grew 18%, showing robust momentum outside the e-commerce softness, and management expects this to stay range-bound.
• Banca delivered 11% growth at Axis Bank while other banca partners collectively grew 54%, driven by new bank relationships signed over the last two years; in some newer acquisitions the company has become the number one player by counter share.

Amrit Singh: "Some bit of it could be an overall economic effect on the Indian consumer. Some bit of it is also the proportion of high-ticket sizes has reduced as time has kind of gone by."

Margin Expansion: Drivers and the Self-Imposed Cap

• New business margin expanded from 17.5% to 20.1%, with VNB growing 32% to INR 335 crore. The expansion was driven by product mix shift, pricing actions, and rider contributions.
• Smart VIBE launch reshaped the mix: ULIP share fell from 43% to 36% as the new non-participating savings product captured over 50% of its category contribution, a typical pattern when a new product energizes the field force.
• Rider APE surged over 300%, attaching not just to protection but across unit-linked, non-par, and par designs, enhancing sum assured while lifting margins.
• Surrender regulation impact has been mostly mitigated through pricing actions across multiple product categories; management says it is now impossible to isolate any residual effect.
• The margin ceiling is explicit: management reiterated the 24-25% guidance band and stated that if margins run ahead, the surplus will be reinvested into growth and distribution, not retained as profit.

Prashant Tripathy: "If we see margins actually running up ahead of that, we will be very keen on ploughing that back into the business for growth purposes and building distribution. And that's the mindset with which we are approaching this business."

Persistency: A Tale of Two Cohorts

• 13th-month persistency dipped from 87% to 86%, with management attributing the softness partly to broader consumer economic pressure and partly to a declining proportion of high-ticket policies in the book.
• Collection trends are improving month by month as the financial year progresses, and the weakness appears secular across channels rather than concentrated in any one, with traditional policies seeing somewhat slower collections initially.
• 25th-month persistency hit an all-time high of 75%, up approximately 500 bps YoY, showing that later cohorts are performing well even as the front-end cohort shows strain.
• The Axis Max Life app is the strategic answer: a fully in-house digital platform combining policy servicing with wellness benefits, launched in Q1, which management expects to improve both persistency and customer service costs over time through higher engagement.

Protection and Product: Repricing and Regulatory Adaptation

• Protection segment grew 36%, with core pure protection up 26%, while annuities grew 40%. Health products de-grew following October 1 regulatory changes that weakened the product construct from a consumer perspective.
• Protection repricing continued this quarter, as it has in each of the last three quarters, applied selectively across segment cohorts wherever competition and demand allow.
• Riders are becoming a structural margin lever, not just on protection policies but across unit-linked, non-par, and par designs, reflecting an industry evolution toward Southeast Asian market practices where riders enhance sum assured.
• Non-participating savings margins were impacted YoY by design structure changes post-surrender regulations, though sequentially that impact has now been absorbed.
• Health product innovation remains a work in progress; management is still looking for ways to improve the construct after the regulatory changes weakened it.

Distribution and Digital: Channel Dynamics

• Other banca partners grew 54% and are a source of particular excitement; in some recent acquisitions the company has already become the number one player by counter share, and the speed of ramp-up has exceeded expectations.
• E-commerce channel was the drag on proprietary growth, with flat APE driven entirely by moderation in savings-side momentum from market volatility. Management is confident growth will return as the year progresses through product innovation combining market-linked features with guarantees and protection.
• The Axis Max Life app is positioned as a long-term engagement play, offering health and wellness services at no charge to all consumers. Management is patient on upsell, taking a lifetime-value view rather than expecting near-term conversion.
• 15 new partners were added across retail and group channels during the quarter, and eKYC adoption jumped from 35% to 70%, reducing manual effort and improving turnaround times.
• A Gen AI-powered email bot was launched on the servicing front, expected to automate 30% of customer service volumes and enable 20% headcount optimization.

Amrit Singh: "Upsell, definitely a use case, but I think you have to be patient and take very long-horizon views of the overall lifetime value of consumers. We do expect that to pan out, but nothing that I cannot comment on the near term on that."

Regulatory and Structural Catalysts

• The insurance bill is ready for Parliament and in all likelihood will be taken up in the forthcoming session, though it may not happen this time around. The bill is a potential structural catalyst for the sector.
• Axis Bank's proposed 1% investment is awaiting RBI approval; once received, Axis Bank will proceed with either a primary or secondary investment. Discussions are ongoing.
• Rebranding to Axis Max Life is showing early traction: consideration scores jumped from 78 to 83 post-rebrand, with particularly good momentum in Tier 2 and Tier 3 cities.
• Customer metrics are improving: NPS rose from 52% to 54% on an apples-to-apples basis, Touchpoint NPS is up 2 points, and the grievance ratio improved from 55% to 44%.

Prashant Tripathy: "The latest update, as far as we know, is that the bill is ready to be presented in parliament. We just need to wait until it goes through. In all likelihood, it will be picked up in the forthcoming parliament session, may not happen this time around."

Guidance & Commitments

Key Metrics