⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
STARHEALTH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | STARHEALTH | Market Cap | 27,725 Cr. | Current Price | 472 ₹ | High / Low | 534 ₹ |
| Stock P/E | 62.1 | Book Value | 0.00 ₹ | Dividend Yield | 0.00 % | ROCE | 12.0 % |
| ROE | 9.37 % | Face Value | 10.0 ₹ | DMA 50 | 456 ₹ | DMA 200 | 458 ₹ |
| Chg in FII Hold | 0.56 % | Chg in DII Hold | -0.13 % | PAT Qtr | 128 Cr. | PAT Prev Qtr | 54.9 Cr. |
| RSI | 63.7 | MACD | -1.48 | Volume | 6,09,478 | Avg Vol 1Wk | 16,44,658 |
| Low price | 327 ₹ | High price | 534 ₹ | PEG Ratio | 1.65 | 52w Index | 69.8 % |
| Qtr Profit Var | -40.4 % | EPS | 7.59 ₹ | Industry PE | 33.2 |
📊 Core Financials
- Quarterly PAT at 128 Cr vs 54.9 Cr previously, showing sequential improvement but YoY decline (-40.4%).
- ROE at 9.37% and ROCE at 12.0% reflect moderate capital efficiency.
- Debt-to-equity ratio not disclosed, but insurance businesses typically operate with low leverage.
- EPS at 7.59 ₹ provides a modest earnings base, though profitability remains volatile.
💹 Valuation Indicators
- P/E ratio: 62.1, significantly higher than industry average of 33.2, suggesting overvaluation.
- P/B ratio not applicable due to book value reported as 0.00 ₹.
- PEG ratio: 1.65, indicating valuation is expensive relative to growth.
- Intrinsic value appears lower than current price, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Star Health operates in health insurance, focusing on retail health policies and specialized coverage.
- Competitive advantage lies in strong brand recognition, wide distribution, and leadership in standalone health insurance.
- Exposure to rising healthcare demand provides long-term growth opportunities, though claims volatility impacts margins.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 440–460 ₹ range (near 50 DMA at 456 ₹ and 200 DMA at 458 ₹).
- Long-term holding viable for investors seeking exposure to India’s growing health insurance sector.
- Accumulation should be cautious due to stretched valuations and modest return metrics.
Positive
- Strong brand presence in standalone health insurance.
- Sequential PAT recovery (128 Cr vs 54.9 Cr).
- FII holdings increased (+0.56%), showing foreign investor confidence.
Limitation
- High P/E (62.1) compared to industry average (33.2).
- Weak ROE (9.37%) and ROCE (12.0%).
- No dividend yield, limiting investor returns.
Company Negative News
- Quarterly profit variation shows decline (-40.4%).
- DII holdings decreased (-0.13%), showing reduced domestic institutional support.
- Stock trading below recent highs (534 ₹), reflecting limited momentum.
Company Positive News
- Sequential PAT recovery highlights operational improvement.
- FII holdings increased, showing foreign confidence.
Industry
- Industry PE at 33.2, much lower than Star Health’s 62.1, highlighting sector undervaluation relative to Star Health.
- Health insurance industry expected to grow steadily with rising healthcare demand and awareness in India.
Conclusion
- Star Health is financially stable with strong brand presence but faces weak profitability metrics.
- Valuations remain stretched, making accumulation near 440–460 ₹ more attractive.
- Best suited for long-term investors seeking health insurance exposure, but caution advised due to high valuation multiples and earnings volatility.
I can also prepare a peer comparison with ICICI Lombard and HDFC ERGO to highlight how Star Health stacks up in valuation and profitability. Would you like me to draft that next?