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Star Health Q3 Results Review - Strong Performance Driven By A Beat On Premium: Motilal Oswal

Star Health has maintained its guidance of 63-65% loss ratio and 93-95% combined ratio for FY24.

<div class="paragraphs"><p>Filling an insurance form in hospital. (Source: freepik)</p></div>
Filling an insurance form in hospital. (Source: freepik)

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Motilal Oswal Report

Star Health and Allied Insurance Company Ltd. reported a profit after tax of Rs 2.1 billion in Q3 FY23 versus Rs 931 million in Q2. This was 22% above our estimate led by better-than-expected net earned premium growth (16% beat) to Rs 29 billion. Gross direct premium income grew 10% YoY to Rs 31 billion.

Star Health has maintained its guidance of 63-65% loss ratio and 93-95% combined ratio for FY24. The confidence in the guidance stems from price hike in the flagship product that contributed ~50% of the premium and growth from banca channels during the quarter.

We raise our FY23E earnings per share by ~13% while broadly retaining our FY24/FY25 estimates, as the benefits from better-than-expected underwriting performance were offset by weaker-than-forecasted investment performance.

Our combined ratio estimates are lower by 90 bps/40 bps/60 bps for FY23/ FY24/FY25 to 95.0%/93.8%/93.3%, respectively.

Click on the attachment to read the full report:

Motilal Oswal Star Health Q3FY23 Results Review.pdf
Opinion
Star Health Q3 Results: Profit Rises, Beats Estimates

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