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Motilal Oswal Report
Star Health and Allied Insurance Company Ltd.'s profit for the quarter stood at Rs 2.9 billion, as compared to our estimate of Rs 1.9 billion, registering a beat of 49%. Adjusted for gains from reinsurance treaty, profit after tax came in at Rs 2.4 billion, 24% higher than our estimates.
Incurred claims and claims ratio were broadly in line with our estimates. Additionally, Star Health's plans to implement price revisions for a few products in the current quarter, which accounts for ~10% of the total premium.
We have increased our earning per share estimates 10%/2.7%/3.9% for FY24/25/26 to factor in higher underwriting profits. Considering the long-term growth potential for the industry, along with investments by Star Health in profitable channels and products,
we reiterate our 'Buy' rating on the stock with a target price of Rs 730 (based on 30 times FY26E earning per share).
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