NEW DELHI (Reuters) – Hospital operator and life insurer Max India Ltd’s consolidated net loss widened on increased investment for its insurance business, its chairman said on Wednesday.
Three-fourths of Max’s revenue comes from its insurance joint venture with New York Life International, and this venture is required by law to maintain a portion of premiums as reserves.
This, along with a capital expenditure of 2.59 billion rupees during the December quarter, widened Max’s loss in the period to 940 million rupees from 40 million rupees in the prior-year quarter, Chairman Analjit Singh said.
Operating revenue rose 24 percent to 11.34 billion rupees, Max said in a statement.
“That loss is all because of the insurance business,” Singh told a news conference.
The firm has said it expects the insurance unit to break even by 2011/12, and officials on Wednesday backed the forecast.
“Break-even on the consolidated basis (for Max India) will go in tandem with break-even of the life insurance business, which will be in 2011/12. Carryforward losses will be wiped out by 2013/14,” Mohit Talwar, director – business developement, said.
OUTLOOK
Analjit Singh said the economic turmoil would temper growth in its insurance business, forecasting a 45 percent growth in new business in the full year, compared with an earlier estimate of 65 percent.
First year premiums, or sales of new insurance policies, have grown 43 percent to 1.58 billion rupees in the nine months to December 31.
Max expects revenue of 50 billion rupees for the full year to March 31, and a loss of 5.5 billion rupees, Sujatha Ratnam, chief financial controller, said.
It has a capital expenditure plan of 7 billion rupees in 2009/10, compared with 7.5 billion rupees in the present financial year, she said.
Shares in the firm jumped 19 percent up after the results, before closing 15.6 percent higher on the day at 124.65 rupees. The broader market was up 2.81 percent.
