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Business News/ Markets / Stock Markets/  Rakesh Jhunjhunwala portfolio: Star Health gets buy, brokerages see up to 65% up
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Rakesh Jhunjhunwala portfolio: Star Health gets buy, brokerages see up to 65% up

Rakesh Jhunjhunwala portfolio: Star Health share price may go up to ₹1500 levels in 18 to 24 months, say stock market experts

Rakesh Jhunjhunwala portfolio: Star Health Insurance company is one of the well known brands in the Indian market, say stock market experts. (MINT_PRINT)Premium
Rakesh Jhunjhunwala portfolio: Star Health Insurance company is one of the well known brands in the Indian market, say stock market experts. (MINT_PRINT)

Rakesh Jhunjhunwala portfolio: Shares of Star Health Insurance got listed recently. The Rakesh Jhunjhunwala-backed public issue had a subdued listing and Star Health share price has been around its price band of 870 to 900 per equity share since listing. According to stock market experts, the insurance company has focus on retail business (B2C) and it is one of the well known brands in Indian market. The company was under stress due to higher number of claims during Covid pandemic spread but in the wake of unlock activities, the company is expected to come on track and in next one to two years, Star Health share price may go up to 1500 levels.

Advising positional investors to buy this Rakesh Jhunjhunwala portfolio stock; Avinash Gorakshkar, Head of Research at Prpofitmart Securities said, "Star Health Insurance company is one of the well known brands in the Indian market. It has a good track record of claim disbursal and it mainly focuses on the B2C or retail segment, which has immense potential for growth post-Covid. The company's balance sheet is under stress due to high Covid-19 claims but in the wake of unlock activities, the company is expected to report strong quarterly numbers in upcoming quarters."

Echoing with Avinash Gorakshkar's views; Avinash Singh, Senior Research Analyst at Emkay Global Financial Services said, "The Indian retail health insurance industry is well-slated for a strong near 20 per cent premium CAGR in the coming decades as penetration within the total addressable market (TAM) of 400mn continues to improve from the current abysmal level of around 12 per cent. Increase in sum assured to catch up with medical inflation, age cohort pricing gains and re-pricing will likely account for half of the premium growth."

Avinash Singh of Emkay Global went on to add, "We estimate Star Health’s GWP to see a 25% CAGR through FY25. Unit economics are extremely favorable – we expect ROE of 18%+ as claims normalize in a 66-67% band (after Covid-19 hump), capping combined ratio at 94-95%. We apply a DCF model to arrive at our Mar’23E TP of 1135. We are of the view that investors should not be deterred by high valuations, which are rightfully anchored to Star Health’s nearly unassailable position in a high-growth industry."

However, Avinash Gorakshkar of Profitmart Securities suggested investors to hold the counter for some more period citing, "One should have a long-term perspective in regard to Star Health stocks as it is poised to go up to 1500 levels in next 18 to 24 months." He advised investors to buy this Rakesh Jhunjhunwala stock at current levels and maintain ‘buy on dips’ strategy on every 4-5 per cent dip from its current levels.

Batting in favour of long-term position in Star Health insurance shares; Ravi Singhal, Vice Chairman at GCL Securities said, “Compared to its peers, the stock is priced 10-15 higher. So, one should wait for the stock to correct as it may come around 750 levels in short-term. We recommend long-term investors to buy around 750 to 800 levels and hold the counter for long-term."

Star Health share price closed around 888 on NSE on 13th December 2021.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Published: 14 Dec 2021, 09:38 AM IST
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