Motilal Oswal's research report on Star Health
Star Health’s (STARHEAL) net earned premium rose 12% YoY to INR39.4b (in line) during 1QFY26. Claims ratio at 69.5% (in line) grew 190bp YoY, driven by a 15% YoY increase in net claims incurred to INR27.4b (in line). Commission ratio at 14.7% (est. 14.5%) rose 120bp YoY, while net commission grew 18% YoY to INR5.1b (in line). Expense ratio at 17.9% (est. 17%) declined 20bp YoY, with employee expenses growing 6% YoY and other expenses rising 13% YoY. Higher-than-expected expense and commission ratios led to a combined ratio of 102.2% (up 300bp YoY), which was 120bp above our estimates. Excluding 1/n impact, combined ratio was at 100.8%.
Outlook
Considering the in-line underwriting performance, we have kept our estimates unchanged. We reiterate our BUY rating with a TP of INR520 (based on 29x FY27E EPS).
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