Emkay Global Financial has given Buy recommendation for Star Health with a target price of Rs. 1040 in its research report issued on Mar 24, 2022

Emkay Global Financial’s report on Star Health

We hosted management of Star Health and Allied Insurance Company in Mumbai on 23rd Mar’22 for meetings with a large number of DIIs to discuss the company’s business performance and growth trajectory and address investor concerns. The key highlights: 1) the company is well on track to return to profitable growth; 2) its capital position is comfortable to support growth in coming years. Investors positive on retail health insurance: Most of the investors were confident about the strong growth potential of retail health insurance business in India and acknowledged Star Health’s MOAT in this business segment. At the time of the IPO, the hesitation of DIIs was mainly on valuation grounds, and worse-than-expected results of Q3FY22 further dented confidence. However, after the recent correction in the stock price and increasing prospects of a quicker turnaround in profitability in the wake of blunting Covid-19 severity, investors are looking at Star Health closely.


Overall, Star Health remains an attractive story in a sunrise sector. 1-2 quarters of profitable growth delivery will likely lead to a material outperformance of Star Health’s shares, in our view. We reiterate Buy with our Mar’23 TP of Rs1, 040, implying an FY25E P/E of ~46x and P/GWP of 2.8x.

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At 14:35 hrs Star Health & Allied Insurance Company was quoting at Rs 713.35, up Rs 16.20, or 2.32 percent.

It has touched an intraday high of Rs 719.95 and an intraday low of Rs 685.00.

It was trading with volumes of 21,466 shares, compared to its thirty day average of 69,978 shares, a decrease of -69.32 percent.

In the previous trading session, the share closed up 5.68 percent or Rs 37.45 at Rs 697.15.

The share touched its 52-week high Rs 940.00 and 52-week low Rs 603.00 on 10 December, 2021 and 16 March, 2022, respectively.

Currently, it is trading 24.11 percent below its 52-week high and 18.3 percent above its 52-week low.

Market capitalisation stands at Rs 41,054.87 crore.

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