Rakesh Jhujhunwala-owned inventory Star Health and Allied Insurance Company continued to reel underneath strain and hit a brand new low of Rs 488.55 apiece on the BSE in Thursday’s intra-day commerce. The inventory of the final insurance coverage firm quoted decrease for the twelfth straight buying and selling day and has slipped 31% from Rs 703.35, touched on June 14, 2022, through the interval. The decline in Star Health share value continued regardless of the corporate saying that it had signed an settlement with IDFC FIRST Bank for distribution of its medical insurance options on June 27. In the final 5 periods, Star Health share value has tanked round 10%.
Star Health inventory varieties a part of ace investor Rakesh Jhunjhunwala’s portfolio. He is a promoter of the corporate. Jhunjhunwala (14.4%) and his spouse Rekha Jhunjhunwala (3.11%) held 17.51 per cent stake within the agency as of the 31 March 2022 quarter, in keeping with the shareholding sample information. In phrases of variety of shares, the stake interprets into 100,753,935 shares of the corporate. Of the overall variety of shares, Jhunjhunwala holds 82,882,958 shares and his spouse has 17,870,977 shares. Star Health made its inventory market debut in December final 12 months, and has corrected 46% from its challenge value of Rs 900. At current, the inventory is quoting 48% down from its report excessive stage of Rs 940, touched on itemizing day.
Should you purchase Star Health shares?
Emkay Global: Buy | Target value: Rs 945
Despite the steep correction within the inventory, Emkay Global has given a ‘buy’ tag with a goal value of Rs 945. “Overall, Star Health remains an attractive story in a sunrise sector. In our view, 1-2 quarters of profitable growth delivery will likely lead to a material outperformance of Star Health’s shares. The recent steep fall in the share prices provides an attractive entry point. We have a Buy rating on the stock with a target price of Rs 945,” the brokerage mentioned.
Use correction to purchase on dips for the long-term
“Star Health care has witnessed a disappointing stock performance post its listing, falling ~45% from its 52-week high. The company is a leading health insurance player in India having a market share of 32% in the retail segment and 14% in the overall health insurance business. The company has a long runway of growth due to low penetration of health insurance in India, rising out-of-pocket expenditure, inadequate financial protection for unfavorable health occurrences, and increased awareness and affordability. The company’s singular emphasis on health insurance products allows it to create innovative products and deliver excellent customer service,” mentioned Punit Patni, Equity Research Analyst, Swastika Investmart Ltd.
Patni additional added, “The company has plans to improve its distribution network by focusing on BANCA & digital channels, improving claim ratio, optimizing OPEX, and keep on introducing innovative products to enhance its profitability. However, investors must be aware of the competitive nature of the industry and being in a mono-line business, the company is subject to black swan events like the covid pandemic. Further, the primary issue of the company was richly priced and the high claim ratios during the pandemic had severely impacted the company, leading to diminishing investors’ interest. Nevertheless, the correction provides an excellent opportunity to buy on dips for the long term and we expect the company to turn profitable in the coming years.”
“Star Health and Allied Insurance Company Limited tanked over 45 per cent from its issue price. Stock prices continue its losing streak for twelve consecutive sessions despite the insurer has signed a corporate agency agreement with IDFC FIRST Bank for distribution of its health insurance solutions. The Company is presence in 25 states and 5 UT of the country and provides various health insurance plans for individuals, senior citizens, and families in India. As of March 31, 2022. Stock prices are trading with Lower-High & Lower Low formation which suggests the negative movement in the prices. At this juncture one should wait for bounce back as the chances are high for the sell-off in this stock,” mentioned Akhilesh Jat, Category Manager – Equity Research.
(The inventory advice on this story are by the respective analysis analysts and brokerage corporations. FinancialExpress.com doesn’t bear any accountability for his or her funding recommendation. Capital markets investments are topic to guidelines and laws. Please seek the advice of your funding advisor earlier than investing.)
Source: www.financialexpress.com”