Max Financial Services (MFS; holding company for life insurance) clocked a mixed Q3FY19 performance. Growth came in below trend (individual APE up 13% y-o-y) due to the tilt towards lower-ticket, higher-margin protection business (individual protection at 6% versus 4% in 9MFY18) and a diversified portfolio (ULIPs\u2019 proportion down to 40%). It delivered across critical metrics \u2014 persistency, AUM accretion and distribution diversification. It reported an embedded value of `8,250 crore with an NBM of 20.4% (post-cost overrun) and operating RoEV of 18.8% supported by an improving protection mix. We expect growth acceleration and sustained improvement in underlying metrics to drive the rerating ahead. Maintain \u2018Buy\u2019. Growth momentum was below trend with an individual APE up 13% y-o-y on account of: a) the tilt towards lower-ticket protection businesses; and b) limited tilt towards higher- ticket ULIPs (ULIPs\u2019 proportion stood lower at 40%). Qualitatively, growth is being driven by the more profitable protection business, which should lead to a sustained improvement in profitability. Core business momentum continues to improve as reflected in: a) steady improvement in persistency (to 55% in 61st month versus 53% in FY18); and b) continued diversification of distribution mix. Cost ratios were, however, high due to: a) one-off expenses relating to acquisition; and b) investments to build the proprietary channel, which eroded profitability. A healthy AUM (up 16% y-o-y) and controlled opex would be the key contributors to MFS delivering sustainable profits. MFS reported an EV of `8,250 crore, implying an RoEV of 18.8%. NBM (pre-cost overrun) further improved to 22.8% (20% in 9MFY18) owing to higher contribution from protection products. Meanwhile, higher-than-expected cost overruns restricted post-cost NBM to 20.4%.