Star Health - Focusing On Profitable Growth: Motilal Oswal

Motilal Oswal Report

Star Health and Allied Insurance Company Ltd. has tightened its underwriting standards to focus on high-quality business. We remain optimistic about the overall prospects for the company, backed by:

1. strong growth in retail health, given under-penetration,

2. strong push from the banca channel,

3. sustained growth in specialized products, and

4. deepening presence.

The company is expected to increase prices by 15-20% in Q1 FY25 for its senior citizen health insurance product and Young Star insurance product. These products account for ~10% of the total premium.

In line with its target of doubling its gross written premium to Rs 300 billion and tripling its PAT to Rs 25 billion by FY28, we believe that Star Health can deliver long-term growth with investments made 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 earnings per share).

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