Max Financial Services Ltd. – Value Analysis (BSE INDIA:500271) : January 3, 2017

Capitalcube gives Max Financial Services Ltd. a score of 47.

Our analysis is based on comparing Max Financial Services Ltd. with the following peers – Fortis Malar Hospitals Limited, Piramal Enterprises Ltd., Alchemist Limited and Aditya Birla Nuvo Limited (523696-IN, 500302-IN, 526707-IN and 500303-IN).

Investment Outlook

Max Financial Services Ltd. has a fundamental score of 47 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • Max Financial Services Limited currently trades at a higher Price/Book ratio (5.50) than its peer median (1.48).
  • The market expects 500271-IN to grow faster than its peers and for the company to improve its current ROE.
  • 500271-IN has relatively low profit margins and median asset efficiency.
  • Changes in annual earnings (relative to peers) are better than the change in its revenues (relative to peers), implying the company is focused more on earnings.
  • 500271-IN‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s median gross margin and relatively low pre-tax margin suggest high operating costs versus peers.
  • While 500271-IN‘s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • 500271-IN currently does not have any debt.

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Leverage & Liquidity

500271-IN currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 55.79%.
  • Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include 523696-IN.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Fortis Malar Hospitals Limited 0 2.38 7.76 999
Piramal Enterprises Ltd. 55.79 0.83 1.48 8.49
Alchemist Limited 95.88 2.82 -12.45 -2.64
Aditya Birla Nuvo Limited 68.97 1.08 1.29 14.01
Max Financial Services Limited 0 0.89 -139.53 2103.87
Peer Median 55.79 1.08 1.29 14.01
Best In Class 55.79 2.82 7.76 2103.87

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Company Profile

Max Financial Services Ltd. invests and engages in insurance, healthcare and clinical research businesses. The company was founded by Analjit Singh on February 5, 1982 and is headquartered in New Delhi, India.


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