Reduce Star Health; target of Rs 525: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Star Health with a target price of Rs 525 in its research report dated May 01, 2024.

Broker Research

May 02, 2024 / 14:03 IST

reduce

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Star Health

At 92.8% for Q4FY24 (and 96.7% for FY24), the combined ratio (CoR) of Star Health was slightly worse than our estimates. However, the higher investment income drove Q4 PAT to Rs1.4bn, putting it ahead of our estimate of Rs1.2bn. Management expects Company to clock better-than-industry growth, while following a quality underwriting approach. With numerous initiatives to better the loss ratios, Management expects the CoR to improve going further. Overall, Q4FY24 performance is largely status quo and we shall await for the early signs of volume-led premium growth, before changing our views.

Outlook

To bake-in the Q4 developments, we have tweaked our FY25-26 estimates resulting in ~1-3% cut in U/W profit, led by a slight increase in CoR leading to ~2% cut in our PAT estimates. We reiterate our REDUCE rating on the stock with a revised Mar-25E TP of Rs525/sh (from Rs500 earlier), implying FY26E P/E of 24x.

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