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STARHEALTH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | STARHEALTH | Market Cap | 27,137 Cr. | Current Price | 461 ₹ | High / Low | 534 ₹ |
| Stock P/E | 60.8 | Book Value | 127 ₹ | Dividend Yield | 0.00 % | ROCE | 12.0 % |
| ROE | 9.37 % | Face Value | 10.0 ₹ | DMA 50 | 461 ₹ | DMA 200 | 460 ₹ |
| Chg in FII Hold | 0.56 % | Chg in DII Hold | -0.13 % | PAT Qtr | 128 Cr. | PAT Prev Qtr | 54.9 Cr. |
| RSI | 51.2 | MACD | -0.74 | Volume | 4,94,550 | Avg Vol 1Wk | 5,28,859 |
| Low price | 327 ₹ | High price | 534 ₹ | PEG Ratio | 1.62 | Debt to equity | 0.06 |
| 52w Index | 64.7 % | Qtr Profit Var | -40.4 % | EPS | 7.59 ₹ | Industry PE | 33.4 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT rose from ₹54.9 Cr. to ₹128 Cr., but YoY profit variation shows -40.4% decline.
- Margins: ROE at 9.37% and ROCE at 12.0% → modest efficiency.
- Debt: Debt-to-equity ratio of 0.06 → low leverage, balance sheet stable.
- Cash Flow: Supported by insurance premium inflows, though profitability remains volatile.
- Return Metrics: EPS at ₹7.59, modest earnings power.
💹 Valuation Indicators
- P/E Ratio: 60.8 vs Industry PE of 33.4 → highly overvalued.
- P/B Ratio: Price ₹461 / Book Value ₹127 ≈ 3.63.
- PEG Ratio: 1.62 → valuation expensive relative to growth.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Operates in health insurance, one of India’s largest standalone health insurers.
- Competitive advantage lies in strong brand recognition and wide distribution network.
- Challenges include high claim ratios, regulatory pressures, and profitability volatility.
📈 Entry Zone Recommendation
- Technicals: RSI at 51.2 (neutral), MACD negative, price near 50DMA (461) and 200DMA (460).
- Entry Zone: Attractive accumulation near ₹440–455 for long-term investors.
- Holding Guidance: Suitable for long-term holding given industry potential, but profitability risks must be monitored.
✅ Positive
- Low debt-to-equity ratio (0.06).
- Strong brand presence in health insurance sector.
- FII holdings increased (+0.56%).
⚠️ Limitation
- Weak ROE (9.37%) and ROCE (12.0%).
- High P/E (60.8) compared to industry average (33.4).
- No dividend yield (0.00%).
📉 Company Negative News
- Quarterly profit variation declined (-40.4%).
- DII holdings decreased (-0.13%).
- Stock corrected from ₹534 to ₹461.
📈 Company Positive News
- PAT improved sequentially to ₹128 Cr. from ₹54.9 Cr.
- FII confidence increased (+0.56%).
- Neutral RSI may support stability in near term.
🌐 Industry
- Health insurance industry benefits from rising healthcare costs and increasing awareness.
- Industry PE at 33.4 indicates sector trades at lower valuations compared to STARHEALTH.
- Government push for insurance penetration supports long-term opportunities.
🔎 Conclusion
- STARHEALTH shows strong brand presence and low debt but suffers from weak profitability and high valuation.
- Valuations are stretched, limiting near-term upside.
- Best considered for long-term investors with entry near ₹440–455; holding depends on margin recovery and sustained demand growth.