Investec has retained its Sell rating on Star Health, with a target price of ₹625, suggesting a potential upside of 17% from the current market price of ₹534.45.
Key insights from Investec’s report:
- Earnings Miss: Star Health’s Q2 PAT fell 28% short of Investec’s estimates, signaling challenges in profitability.
- Combined Ratio: The combined ratio stood at approximately 103%, which Investec described as surprising, indicating higher-than-expected costs relative to premiums earned.
- Market Share: Despite challenges, Star Health gained market share in the retail health insurance segment, reflecting some resilience in its core business.
- Challenges Ahead: The company is facing multiple hurdles due to its size and the intense competition within the health insurance sector, potentially impacting future growth and profitability.
Investec’s target reflects a cautious view, acknowledging market share gains but emphasizing the challenges Star Health faces in a competitive market environment.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform due diligence before making investment decisions.
