Target: ₹653
CMP: ₹557.35
Star Health and Allied Insurance company commenced its operations in 2006 and is India’s first standalone health insurance provider. The company offers health, personal accident and both domestic and overseas travel insurance products. The company has one of the largest health insurance networks in India comprising more than 14,200 hospitals.
Net earned premium (NEP) grew 14.7 per cent y-o-y to ₹3,206 crore in Q2-FY24, led by double-digit growth in retail health insurance. The combined ratio improved 130bps y-o-y to 99.2 per cent.
Strong growth momentum in retail health premium, new product launches, sustained focus on digitalisation, wide distribution network, new bancassurance partnerships and a healthy solvency ratio auger well for Star Health’s future performance. It recently launched a dynamic UPI QR code-based payment option to simplify the process of purchasing and renewing health insurance.
The company is a market leader with a 33 per cent market share in the retail health space and is well positioned to tap into the large addressable, and yet, underpenetrated healthcare segment.
The stock is available at attractive valuations. With a positive view, we upgrade our rating to Buy with a revised target price of ₹653, based on 4.85x FY25E BVPS.