STARHEALTH - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.4

📊 Fundamental Analysis

Strengths

Sector Tailwinds: Health insurance is a high-growth segment in India with low penetration and rising demand.

Improved Profitability: PAT jumped to ₹263 Cr from ₹0.51 Cr — a major turnaround.

EPS of ₹10.0: Reasonable earnings base for a mid-cap insurer.

PEG Ratio of 1.15: Slightly above ideal, but still acceptable for a growth-oriented business.

ROCE (11.9%) & ROE (9.57%): Moderate, but improving — reflects operational scaling.

Strong DII Buying (+5.64%): Domestic institutions are bullish, indicating confidence in long-term prospects.

Technically Neutral to Positive

RSI at 51.2: Balanced momentum.

MACD positive: Mild bullish signal.

Price near 50 DMA and 200 DMA: Consolidation zone — potential base formation.

Concerns

High P/E (43.4) vs Industry PE (39.0): Slightly overvalued.

Zero Dividend Yield: Not attractive for income-focused investors.

Significant FII Selling (−4.80%): Indicates foreign investor caution.

Volatile Earnings: Qtr Profit Var of −17.7% suggests inconsistency.

Volume Below Average: Short-term interest may be waning.

💡 Is It a Good Long-Term Investment?

Moderately yes. Star Health has strong brand recognition and operates in a promising sector. While valuation is slightly stretched and earnings are volatile, its improving profitability and institutional support make it a reasonable long-term candidate — especially if entered at a better price.

🎯 Ideal Entry Price Zone

Fair Value Zone: ₹400–₹420 Offers a margin of safety and aligns with technical support levels.

Aggressive Entry: ₹350–₹370 Near the 52-week low — ideal for high-conviction investors seeking long-term upside.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 3–5 years to benefit from sector growth and operational maturity.

Exit Strategy

Partial Exit near ₹600–₹620 if valuation stretches without consistent earnings support.

Full Exit if ROE drops below 7% or PEG rises above 2.0.

Re-evaluate if RSI crosses 75 or MACD turns sharply negative — could signal short-term exhaustion.

Would you like a peer comparison with ICICI Lombard, HDFC Life, or Niva Bupa to assess competitive positioning and valuation dynamics?

Edit in a page