Max Financial Services (MFSL) Q4 05/06 earnings summary

Executive summary

• Consolidated total income rose to Rs 153,893.73 lakh from Rs 69,978.61 lakh; net profit was Rs 31,310.24 lakh after a prior-year net loss, with a Rs 42,763 lakh Hutchison Essar disposal gain contributing materially.

• Life insurance and healthcare expanded rapidly; specialty products remained profitable, while healthcare, staffing and clinical research continued to require investment.

Financial highlights

• Consolidated PBT was Rs 33,526.16 lakh versus a loss of Rs 15,656.34 lakh; net profit was Rs 31,310.24 lakh versus a net loss of Rs 11,672.48 lakh.

• Consolidated basic EPS was Rs 93.52 and diluted EPS Rs 89.08; the prior-year basic and diluted EPS were both negative Rs 48.44.

• Standalone total income was Rs 148.85 crore and net profit Rs 5.89 crore; PBT was Rs 3.52 crore versus Rs 6.45 crore in FY04/05.

• Standalone prior-year PAT included a Rs 5.50 crore exceptional item; FY05/06 net profit was Rs 5.89 crore.

Outlook and guidance

• Life insurance growth was expected to remain strong, with private-sector industry growth forecast at 59% CAGR over five years and private market share expected to reach 45% by 2010.

• Healthcare plans included ramping the Saket tertiary hospital and opening a 100-bed Gurgaon facility, expected by June 2007; total beds were projected to reach over 1,600 by 2008.

• A 20,000 TPA specialty-products line was planned to become operational in Q2 2007; a third metalliser was expected in October 2006, with metallising capacity targeted to triple by mid-2007.

• Healthcare staffing planned two additional sourcing and training centres; placement revenue was expected to accelerate as more candidates became billable.