Rakesh Jhunjhunwala on Monday suffered heavy losses in his general insurance firm Star Health and Allied Insurance Company. After delivering double-digit gains last month, Star Health shares started August on a bearish note as investors booked profits. Star Health is the second largest stock in Jhunjhunwala’s portfolio after Titan by value. The big bull of D-Street is also the promoter of the company. Shares of Star Health fell on Monday after the company announced its financial performance for the quarter ended June 30, 2022 (Q1FY23). However, despite the current sell-off, Star Health shares have strong prospects ahead as analysts assign buy ratings to the company’s product and distribution efforts that add confidence to its earnings potential.
on Monday, star health settlement of shares below 710.20 32.45 or 4.37% on BSE. Shares touch intraday low of Rs. 705 per and higher 765 per day. At the current price level, the company’s Market hat is around 40,914.63 crores.
Last month, Star Health shares gained nearly 57%.
As on June 30, 2022, Rakesh holds 8,28,82,958 equity shares or 14.39% stake in the company. He also holds 1,78,70,977 equity shares or 3.10% in Star Health through his wife Rekha Jhunjhunwala. Overall, the couple holds 10,07,53,935 equity shares or 17.49% of the company.
Rakesh manages his and wife’s portfolio.
Rakesh’s wealth in Star Health almost declined due to Monday’s fall 326.95 crore (100,753,935 X.) 32.45) in a single day.
As per the trendline data, the holding value of Jhunjhunwala is around 7,151 crore in Star Health till August 1, 2022. As of July 29, the value of his stake was approx. 7,528.3 crore in the company.
In Q1FY23, Star Health posted a net profit of 213.24 crore as compared to a loss of Rs. 209.78 crore more losses in Q1FY22 82.03 crore in Q4FY22. Company’s total income increased 2,809.01 crore in Q1FY23 as against 2,331.90 crore in the same quarter last year and 2,740.38 crore in the previous quarter.
Should you invest in Star Health stocks after the first quarter?
Anshuman Deb and Ravin Kurva Research Analysts, ICICI Securities said, “Star Health (STAR) Q1FY23 result underscores strong business execution around product and distribution which will help the industry in terms of retail premium growth and overall loss/sustaining combined. Provides confidence on outperformance guidance. Ratio of 63-65% / 93-95% respectively. Distribution efforts are spread across channels including rural focus, while product strategy utilizes new designs, re-evaluations as well as hospital interactions The combination of 32% retail health premium market share in Q1FY23 and overall strong retail health insurance growth outlook makes us creative at Star.”
Both said, “Buy based on 40x FY24E EPS of Rs 21.5 (earlier Rs 17.6) with revised target price of Rs 858 (earlier Rs 700). We expect 19% premium CAGR between FY22-24E, combined ratio of 95/- Investment yields of 94% and 7%/7.5% respectively for FY 23/24E. We have completed our FY 24 to infuse new confidence in terms of earnings potential seen in the Company’s product and distribution strategy. income has been raised.”
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