Shares of Star Health and Allied Insurance closed at Rs. 533.25/share (down 5.20%) on the BSE. In Friday's trade, the stock reached a fresh 52-week low of Rs. 531.
The stock has dropped 43.29% from its 52-week high of ₹940.10, touched on the day of listing. It has a negative PE and a negative EPS of 29.68 and Rs. 18.08.
In the last one week, the stock has underperformed by falling 14 per cent, as compared to a 2.20 per cent rise in the Nifty50. Furthermore, in the last one month, the stock tanked by 27.59%.
Star Health made its stock market debut on December 10, 2021. With Friday's closing price of ₹533, the stock has corrected by 40 per cent from its issue price of ₹900/share.
The shareholders of Star Health have lost about Rs. 13,345 crore following a 43% crash in the stock from its all-time peak.
The market capitalization of Star Health came down to Rs. 31,035 crore (as of June 24, 2022). This was exactly Rs. 13,345 crore lower than its peak m-cap of Rs. 44,380.05 crore in December 2021, when the stock had zoomed to an all-time high of Rs. 940.10 on December 10, 2021.
For the financial year 2021-22 (FY22), the company reported a net loss of ₹1,041 crore, as against a net loss of ₹1,086 crore in FY21. From ₹4,877 crore to ₹10,289 crore, total revenue increased by 111 per cent.
However, Motilal Oswal is bullish on Star Health and it recommended a 'BUY' rating on the stock with a target price of ₹840 in its research report dated June 02, 2022.
"We remain optimistic about the overall prospects of Star Health, backed by strong growth in retail health, given its under-penetration; healthy earnings growth, led by normalisation in the claim ratio; limited cyclicality risk (commercial lines and motor insurance have high cyclicality")," said Motilal Oswal.
The brokerage firm expects the gross premium to clock a 25% CAGR and the claim ratio to normalise at 64%, with a combined ratio of 92% over FY22–24.
On the other hand, ICICI Securities has a 12-month target price of ₹825 on Star Health, which hints toward an upside of 54 per cent from its June 24 closing price. It valued the stock at 2.6x FY24E GDPI (53x FY24E EPS).
Star Health is a market leader in the retail health insurance segment with a 33% market share. As of March 2022, Star Health has 807 branches and 12000+ network hospitals, with a presence in 25 states and five union territories.
Rakesh Jhunjhunwala is the promoter of Star Health and Allied Insurance Company, and owns 10.08 crore shares, or 17.5% stake, in the company along with his wife, Rekha Jhunjhunwala.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.