Star Health and Allied Insurance Company Ltd Share Price: Shares of Star Health and Allied Insurance have been on uptrend in the last few sessions after reporting decent July-September quarter results for fiscal 2023-24 (Q2FY24). Domestic brokerage firm Geojit Financial Services has upgraded its rating on the large cap to a ‘buy’ call and sees 17 per cent returns over the next 12 months.
At a current market price (CMP) of ₹560, Geojit has given a target price of ₹653 and sees potential returns from Star Health increasing to over 17 per cent in one year. On Friday, November 24, shares of Star Health opened at ₹550.05 and gained more than 5 per cent to hit an intra day high of ₹577.85, against a 52-week high of ₹674.95 on the BSE. Shares settled 2.51 per cent higher at ₹571.35 apiece on the BSE.
Star Health and Allied Insurance Q2 Results
Star Health reported a 34 per cent increase in net profit to ₹125 crore for the July-September quarter of current fiscal (Q2FY24). The standalone health insurer posted a net profit of ₹93 crore in the year-ago period.
The company’s total income in the second quarter of the ongoing fiscal rose to ₹3,357 crore against ₹2,918 crore in the year-ago period, Star Health said in a regulatory filing. The net earned premium (NEP) grew 14.7 per cent year-on-year to Rs. 3,206 crore in Q2FY24, led by double-digit growth in retail health insurance.
Growth in NEP led by the retail health segment
In the September quarter, the gross written premium (GWP) increased 16.9 per cent YoY to Rs. 3,732 crore. NEP of health insurance including personal accident rose 14.7 per cent YoY to Rs. 3,206 crore, led by robust growth in the retail health segment –up 17.3 per cent YoY to Rs. 3,023 crore. The company registered a 33 per cent market share in the retail health space, which is over 3x the second-largest player in the industry, according to Geojit.
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, according to the brokerage. It recently launched a dynamic UPI QR code-based payment option to simplify the process of purchasing and renewing health insurance.
Geojit’s outlook on Star Health
‘’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. We hereby upgrade our rating on the stock to BUY with a target price of Rs. 653, based on 4.85x FY25E BVPS,” said Geojit Financial Services.
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.
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Updated: 24 Nov 2023, 05:59 PM IST