Star Health Q3 Results Review - Adjusted PAT Beat Of 24%; Combined Ratio Better Than Estimates: Motilal Oswal

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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