The health insurer’s strong position in a fast-growing industry should support its revenue growth and market share gains, said CLSA.
Star Health’s core strengths – innovative product suite, largest individual agent base and in-house-claim management – will continue to support Star in gaining or maintaining market share in a fast-growing industry, said CLSA.
The stock is down 22% from the IPO price of ₹900. The stock had listed at a near 6% discount to its IPO price of ₹848.80 in December last year.
Jhunjhunwala and his wife Rekha together owned a 17.51% stake in Star Health, according to December quarter shareholding data on the BSE.
“We expect the industry to expand three times plus in the next five years with gross premiums growing from $4 billion to $12 billion and net population (excluding below poverty and government employees) covered by retail policies to increase from 6% today to 11%,” said CLSA.
The company has a 32% market share in the retail segment and retail premiums are three times larger than the next player’s, it said.
“Star’s innovative products, wide distribution, hospital network, in-house claim management and focus on the profitable retail segment should support 29% CAGR in premiums over next two years and return on equity expansion to 20% in FY24,” said CLSA.
