The stock price of StarHealthand Allied Insurance Company, owned by Rakesh Jhujhunwala, continued to rise under pressure, primarily due to the low growth of 2MFY23 and the recent increase in Covid cases, and was significantly revised in recent sessions. According to analysts, the risk of increased claims from the current wave of pandemics probably prompted a sharp inventory adjustment. Inventories have decreased by about 30% in the past month. However, ICICI Securities analysts have a positive outlook for equities, believing that the threat of business impact on life insurers selling retail health insurance is overkill. Domestic brokerage firms expect Star Health stocks to rise to 47% in the future.
Rakesh Junjunwara is a promoter of Star Health. According to shareholding pattern data, Jhunjhunwala (14.4%) and his wife Rekha Jhunjhunwala (3.11%) held a 17.51% stake in the company as of the March 31, 2022 quarter. In terms of the number of shares, the shares are equivalent to 100,753,935 shares of the company. Of the total number of shares, Junjunwara owns 82,882,958 shares and his wife holds 17,870,977 shares. Star Health shares have been revised by 48% from the issue price of 900 rupees when listed on the stock exchange last December. Currently, Star Health’s share price is down 50% from the record high of 940 rupees on the listing date.
Should I buy Star Health stock in a dip?
Share Market Live: Red Senssex, giving up 53000, Nifty 50 below 15700.IndusInd Bank up 3%
Reliance, HDFC Bank, Infosys, SBI, TCS, Coal India, Burrat Forge, NTPC shares featured on July 4th
June Quarter IT Company Performance: TCS, Infosys are likely to deliver strong results
The rupee will fall further this week due to the stronger dollar and the sustained outflow of FII. USDINR trading in this range
ICICI Securities: Purchase
Target price: Rs 700, Upside: 47%
A recent report from a brokerage firm states that Star Health is a retail market leader, firmly established with 550,000 agents, 12,820 network hospitals and 807 branches. He added that the high market share of PSU insurers with low solvency continues to provide strong players like stars with growth opportunities. “Given the range of GDPI growth rate (15-20%) and combined ratio (93-95%), the possible PAT with FY24E is 9.75 billion-11.6 billion rupees and ROE is 13-16%, which is the current level. It means that the rating is 23.5 to 28 times, “the analyst said in the report. FCMs value stocks at a modified target price of 700 rupees. Changes in our multiples reflect the potential for intensified competition, subsequent waves, and an overall rise in the cost of capital, “the analyst said in a report.
Kotak Institutional Investors: Added
FV: Rs 625
FCMs continue to believe that Star Health, with its unrivaled agency power, is the best way to harness the growth of India’s health insurance sector. “The risk of increased claims due to the current Covid wave may have caused a sharp inventory adjustment, but we believe this is overkill. We will reduce estimates and raise the cost of capital. Keep Add in FV from previous Rs775 to Rs625. ” Analysts expect business momentum to catch up, modeling premium growth of 23% in the retail segment and a 25% decline in the group segment over the next 10 months, with overall annual growth of 17%. Equivalent. “Apart from the reduction in estimates, we have fine-tuned medium-term growth and raised the cost of capital from the previous 13% to 13.5%,” he said.
Use mods to buy with a dip in the long run
“Star Health is India’s leading health insurance company, with a market share of 32% in the retail sector and 14% in the overall health insurance business. The company has a low penetration rate of health insurance in India, self. With increased burdens, inadequate financial protection against adverse health conditions, and increased awareness and affordability, we are on a long path to growth. Swastika Investmart Ltd’s equity research analyst, Punit Patni, said: It states as follows.
Patni further said: “The company plans to improve its distribution network by focusing on BANCA and digital channels, improving billing rates, optimizing OPEX and continuing to introduce innovative products to increase profitability. Investors need to be aware of the competitiveness of the industry and have a monoline business, so the company is affected by black swan events like pandemic. In addition, the company’s major problem is high. And the high billing rate during the pandemic had a serious impact on the company and reduced investor interest. Nevertheless, this amendment provided a great opportunity to buy dips in the long run, We expect the company to make a profit in the next few years. “
(The recommended shares in this story are by their respective research analysts and brokerage firms. Financial Express.com is not responsible for any investment advice. Rules and regulations apply to investing in capital markets. Please consult your investment advisor before investing.)
..
