Star Health & Allied Insurance (Star Health) is India’s largest standalone health insurer (SAHI) with a market share of 13% as of 9MFY23 (33% in retail health insurance), which has demonstrated its market leadership position in the agency network. Through this, a strong virtuous cycle has been created. Retail healthcare, and being one of the largest hospitals, highlighted PhilipCapital in a note.
Rekha Jhunjhunwala portfolio:
“All these factors feed into each other, creating very strong entry barriers for existing and new players, based on which we expect Star Health to continue to be a dominant player in the retail health sector. As its loss ratio normalizes to pre-Covid levels, its combined ratio will improve, underwriting performance and profitability will increase. We expect Star Health to deliver a revenue CAGR of 18% in FY22-25 and an ROE of 14% in FY25,” said the note with a BUY rating and target price, initiating coverage on the stock. 675 per share.
PhillipCapital said, “The virtuous cycle created by the strong agency network, market leadership in retail health, and a large hospital network should continue to help Star Health capture the long-term growth opportunities in India’s health insurance industry.” The main risks as per the brokerage could be high agency channel dependency, increasing competition, higher than expected loss ratio and regulatory changes.
As per the recent shareholding pattern on BSE, Rekha Jhunjhunwala holds 3.07% stake in the company while late Rakesh Jhunjhunwala holds 14.25% stake in Star Health till December 2022. Incorporated in 2005, Star Health offers coverage options for retail health, group health. , Personal Accidents and Foreign Travel Insurance.
The views and recommendations given above are those of individual analysts or broking companies and not of o2help
