STARHEALTH - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | STARHEALTH | Market Cap | 27,831 Cr. | Current Price | 473 ₹ | High / Low | 534 ₹ |
| Stock P/E | 62.4 | Book Value | 0.00 ₹ | Dividend Yield | 0.00 % | ROCE | 12.0 % |
| ROE | 9.37 % | Face Value | 10.0 ₹ | DMA 50 | 458 ₹ | DMA 200 | 459 ₹ |
| Chg in FII Hold | 0.56 % | Chg in DII Hold | -0.13 % | PAT Qtr | 128 Cr. | PAT Prev Qtr | 54.9 Cr. |
| RSI | 61.7 | MACD | 2.73 | Volume | 2,94,153 | Avg Vol 1Wk | 14,79,384 |
| Low price | 327 ₹ | High price | 534 ₹ | PEG Ratio | 1.66 | 52w Index | 70.5 % |
| Qtr Profit Var | -40.4 % | EPS | 7.59 ₹ | Industry PE | 33.8 |
📊 Analysis: STARHEALTH shows moderate fundamentals with ROE at 9.37% and ROCE at 12.0%, which are below ideal long-term compounding thresholds. The high P/E of 62.4 compared to industry P/E of 33.8 suggests overvaluation. PEG ratio of 1.66 indicates growth is priced at a premium. Dividend yield is 0%, limiting passive returns. Technicals show support near 458–459 ₹ (DMA 50 & 200), with RSI at 61.7 suggesting neutral momentum. The ideal entry zone lies between 420–450 ₹ for margin of safety. If already holding, consider a long-term horizon only if profitability improves; otherwise, partial exit near 520–530 ₹ resistance is prudent.
✅ Positive
- Strong market cap of 27,831 Cr. ensures stability.
- Quarterly PAT improved to 128 Cr. from 54.9 Cr.
- FII holdings increased by 0.56%, showing institutional confidence.
- Technical support around DMA levels (458–459 ₹).
⚠️ Limitation
- High P/E (62.4) compared to industry average (33.8).
- Low ROE (9.37%) and ROCE (12.0%) below compounding benchmarks.
- No dividend yield, limiting investor returns.
- Quarterly profit variation at -40.4% indicates volatility.
📉 Company Negative News
- Profitability metrics remain weak relative to valuation.
- DII holdings decreased by -0.13%, showing reduced domestic confidence.
📈 Company Positive News
- Recent PAT growth signals operational recovery.
- Improved FII participation adds credibility.
🏭 Industry
- Healthcare insurance sector has long-term growth potential in India.
- Industry P/E at 33.8 indicates STARHEALTH trades at a premium.
- Structural demand drivers: rising healthcare costs, insurance penetration.
🔎 Conclusion
STARHEALTH is moderately rated at 3.6 due to overvaluation and weak ROE/ROCE. Long-term investors should only consider entry in the 420–450 ₹ zone for margin of safety. Current holders may adopt a wait-and-watch approach, with partial profit booking near 520–530 ₹ resistance unless fundamentals improve. Sustainable growth and better return ratios are required for long-term compounding potential.