Max Financial Services Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Retail APE surged 30% in Q3, doubling industry growth: Proprietary channels led with 52% growth, while new banca partnerships scaled rapidly, driving private market share up 53 bps to 9.8%.
• Margins expanded 90 bps YoY to 24.1% despite a ~350 bps gross GST headwind: Cost actions, commercial conversations and product mix tweaks mitigated roughly one-third of the impact in Q3, with 70–80% mitigated on a run-rate basis.
• Axis Bank channel undergoing an intentional, margin-friendly mix shift: ULIP dependence is now "largely in control" after 3–5 quarters of work, with emerging verticals and tech initiatives firing well; management projects "reasonably aggressive" growth in the current quarter.
• Protection and annuity are breakout lines: Retail protection grew 99% and annuities 141% in Q3, both benefiting from structural tailwinds and targeted execution that management believes are sustainable.
• What to watch next quarter: Whether the amalgamation of Axis Max Life and MFSL progresses to a concrete structure, the pace of residual GST mitigation, and if Axis Bank’s growth re-acceleration materialises as guided.

Topline Growth & Channel Dynamics

• Individual APE grew 20% in 9M FY26, twice the 10% industry growth, with an 18% rise in policy count. Over three years, Max’s 21% CAGR compares against 15% for the private sector and 10% for the industry.
• Proprietary channel delivered 52% APE growth in Q3, driven by improved activation rates among new advisers, productivity gains in the direct sales force, and capacity expansion. Offline proprietary channels grew 43%; online business grew 75%.
• Agency channel re-entered the top 4 nationally after a 5–6 year gap, supported by the "Arohan" initiative expanding into Tier 2/Tier 3 locations. On the E-commerce side, Max is the number 1 player on both savings and protection across larger aggregators, and its D2C channel is number 1 in the industry.
• Partnership channel grew 13% in APE terms in Q3, with new banking and broking partnerships (onboarded over the last two years) now contributing around 5% of individual APE. Counter share exceeds 25% across all seven recently acquired bank partners, and Max is number 1 in three of them. Growth in the new banks channel is 103% year-on-year.
• Axis Bank delivered stable ~7–7.5% growth for 9M, but the more important story is a deliberate product-mix shift away from ULIP concentration. Since January of the prior year, Max has worked with the bank to rebalance the mix; emerging channels within Axis (asset verticals, tech initiatives) are now firing well and productivity is improving.
• Non-Axis bank channels skew toward traditional designs rather than unit-linked, providing a natural hedge in the overall product mix.

Sumit Madan: "our projection around this quarter also are reasonably aggressive, Madhukar. And I do not see any challenge the way the momentum at this point of time it Axis is."

Margin Walk & GST Mitigation

• 9M FY26 VNB margin expanded from 21.9% to 23.6%, driving 30% growth in value of new business. Q3 FY26 margins stood at 24.1%, a 90 bps improvement over Q3 FY25.
• The gross GST impact on margins was close to 350 bps. Max mitigated roughly one-third of this in Q3 through cost actions, commercial conversations with distributors, and product-mix tweaks. On a run-rate basis, 70–80% of the impact has been mitigated.
• Policyholder opex grew 25%, but this was inflated by a GST disallowance of INR 295 crore and a one-time gratuity provision of INR 60 crore from labour code changes. Adjusted for these, opex grew only 14%.
• ULIP moderation was intentional, driven by targeted initiatives to improve overall quality and profitability rather than any demand weakness.
• The unit-linked segment carries the heaviest residual GST impact, and it is where accelerated mitigation is most required.
• Management is anchored to a 25% plus/minus margin range, with an explicit bias toward distribution expansion given India’s severe underpenetration. If margins run above that range, the surplus would either be passed to consumers or reinvested.

Amrit Singh: "But assuming that, that also stays and GST impact was not there, your observation is right. The margins could have been 200 basis points higher than what we have reported, for sure."

Product-Line Performance

• Protection momentum has held since late September, with daily traction improving outside the Diwali period. Marketing efforts in Q4 are specifically focused on protection.
• On protection margins, management noted some improvement after running through surrender regulation impacts, but no large step-up; there is some pressure only on specific individual margins within that product category. Product-level margins are not disclosed.

Sumit Madan: "So to your question, whether it is sustainable, at least right now, the momentum still holds good. So we do not see much of a concern. We may be slightly better than the market."

Persistency, Customer Metrics & Digital

• 13-month persistency stood at 85% in Q3, with some pressure from a specific product category in play over the last year, particularly post surrender regulations. The proportion of that category in the book is reducing, and some drop was baked into pricing.
• 25-month persistency improved to an all-time high of 76%, a nearly 420 bps improvement year-on-year.
• Net Promoter Score rose to 58 from 52 at FY25 exit. Touchpoint NPS improved from 55 to 16 (as stated); relationship NPS increased from 50 to 55. The grievance incident rate improved to 36 from 42.
• GenAI-powered email bot doubled 1-day ticket closures from 20% to 40%. The customer app has approximately 6 lakh downloads, 3 lakh monthly active users, a 4.8-star rating, and cumulative transactions exceeding INR 50 crore. Website digital NPS reached a record 74, up 9 points.
• Claims straight-through processing reached 36% for non-early claims, surpassing industry benchmarks for claims up to INR 7.5 lakhs.
• SEO recovery completed after the transition from maxlifeinsurance.com to axismaxlife.com temporarily impacted rankings. Max now ranks number one in term insurance across the top 50 keywords and number two in savings.

Corporate Developments

• Board gave in-principle approval to initiate the amalgamation of Axis Max Life and MFSL. The structure is described as a "fairly simplistic collapse" since MFSL’s large asset is the equity it owns in the underlying entity, but specifics are premature.
• Insurance Act amendments (Sabka Bima Sabka Raksha Act 2025) approved, increasing the FDI limit from 74% to 100% and permitting merger of an insurer with a non-insurer subject to IRDAI approval.
• GIFT City office received all requisite regulatory approvals, positioned as a strategic hub for the NRI segment.
• New product launches included an Online Savings Plan Plus (zero premium allocation charges, unlimited free switches), a corporate retirement and employee benefit plan, and a new participating proposition supporting portfolio rebalancing.
• Management is in advanced discussions with various banks (both PSU and private) for new partnerships, but said it would be premature to name specifics.

Amrit Singh: "collapse of the structure is a very fairly simplistic thing, we have MFSL where large portions of their asset is nothing but the equity that they own in the underlying entity... So, it will be a fairly simplistic collapse, but please allow us time for the specifics and associated details to come."

Guidance & Commitments

Key Metrics