Motilal Oswal's research report onStar Health
Retail health insurance – the fastest-growing non-life insurance segment (FY20-25 CAGR of 18%), has witnessed stellar growth of ~30% in 2HFY26, supported by rising healthcare inflation, improving awareness, increasing middle-class penetration and GST exemption. However, penetration at <5% of Indian population leaves a long runway for steady high-teen growth. Against this backdrop, Star Health and Allied Insurance (STARHEAL) – the largest retail health player with 30%+ market share since FY21 – has seen its retail health GWP growth trajectory improve from 17% CAGR over FY21-26 to 20%+ since Oct’25 to date, while the number of lives covered has seen a 12% CAGR over FY20-25 (vs. 7% for industry). After witnessing unfavorable claims experience in FY25 (retail loss ratio of 69.2% vs. 65.8% in FY24), STARHEAL’s underwriting performance has recovered on the back of strong fresh business growth (+37% YoY in FY26) and calibrated repricing actions with retail loss ratio at 68.2% in FY26. Going forward, the annual repricing on 80% of the portfolio should reflect in further improvement of the loss ratio, along with continued momentum in fresh business.
We estimate a CAGR of 16%/32% in IFRS insurance revenue/PAT during FY26-28, with the CISR improving to 98.3% in FY28E. We maintain BUY rating on the stock with a TP of INR700 (valuing the company at 26x FY28E IFRS PAT).
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latestBusiness News,Sensex, andNiftyupdates. ObtainPersonal Financeinsights, tax queries, and expert opinions onMoneycontrolor download theMoneycontrol Appto stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.