Star Health & Allied Insurance Stock Initiated with Hold Rating by Jefferies - Price Target INR550.00
In a recent development, brokerage firm Jefferies initiated coverage on Star Health & Allied Insurance (STARHEAL:IN) stock with a Hold rating and a price target of INR550.00. Jefferies emphasized Star Health's dominant position in the retail health insurance sector, boasting a 33% market share and the largest agency network in the industry.
However, Jefferies also expressed concerns about ongoing industry challenges that could impact the company's profitability. The brokerage anticipates an elevated combined ratio of 97-98% and a steady return on equity (ROE) of 11-13% for Star Health in the fiscal years 2025 to 2027.
The price target of INR550.00 implies a valuation at 28 times the projected earnings for September 2026. Jefferies noted that potential increases in retail health insurance volumes or a reduction in competition could present upside risks to their assessment.
Despite its strong market position, Star Health faces industry-wide challenges that could hinder its profitability in the future. The Hold rating and price target set by Jefferies reflect a cautious outlook on the stock's potential performance.
In conclusion, investors should closely monitor Star Health & Allied Insurance's performance in light of the industry challenges and the brokerage's assessment. Understanding the company's position and the factors affecting its profitability is crucial for making informed investment decisions.