Buy Star Health and Allied Insurance Co; target of Rs 738: Geojit Financial Services

Geojit Financial Services research report on Star Health and Allied Insurance Co

Star Health and Allied Insurance Co commenced operations in 2006 and is India’s first standalone health insurance provider. It offers health, personal, accident and travel (both domestic and overseas) insurance. It has one of the largest health insurance networks in India with more than 14,340 hospitals. In Q1FY25, net earned premium (NEP) grew 15.7% YoY to Rs. 3,520cr with growth in retail health premium and enhanced contribution from new business. However, the combined ratio deteriorated 140bps YoY to 99.2%, owing to a 220 bps YoY rise in claims ratio. In Q1FY25, Star Health delivered sound performance with increasing contribution from distribution networks in GWP. The renewal and combined ratios are expected to improve on the back of continuous management attention.

Outlook

Hence, we retain our BUY rating on the stock with a target price of Rs. 738, based on 4.75x FY26E BVPS.