Jhunjhunwala's Star Health shares rise 4% today; more upside ahead?
The stock rose as much as 3.9 per cent to hit the day’s high of Rs 500 on the BSE, compared with the previous close of Rs 481 apiece.
- Oct 31, 2025,
- Updated Oct 31, 2025 10:13 AM IST
Shares of Star Health and Allied Insurance, a key portfolio holding of investor Rekha Jhunjhunwala, rose nearly 4 per cent in Friday’s trade after the insurer reported its September quarter results on Wednesday. The rally also came after JM Financial upgraded the stock to ‘Add’ from ‘Hold’ and raised its target price to Rs 525.
The stock rose as much as 3.9 per cent to hit the day’s high of Rs 500 on the BSE, compared with the previous close of Rs 481 apiece. JM Financial’s upgrade implies an upside potential of around 9 per cent from current levels.
Rekha Jhunjhunwala, along with her late husband and ace investor Rakesh Jhunjhunwala, together held a 17.14 per cent stake in Star Health and Allied Insurance Company as of the September quarter.
The brokerage noted that Star Health’s “claims trajectory looks on track” following targeted price hikes in its retail portfolio and a sharper focus on profitable segments. “After poor claims performance in 1HFY25, the company had taken targeted price hikes in its retail portfolio and cut its loss-making corporate business, instead focusing on SMEs,” JM Financial said.
According to the brokerage, the insurer’s claims ratio improved by 130 basis points year-on-year to 71.5 per cent in the September quarter, aligning with its estimates. The combined ratio came in at 103.8 per cent, broadly meeting expectations. JM Financial expects further improvement, forecasting the claims ratio to decline to 70 per cent in Q3 and 67 per cent in Q4 as the benefits of premium hikes filter through earnings.
Star Health’s growth strategy continues to revolve around its retail business, which now accounts for 95 per cent of the total portfolio after a complete exit from the group employer–employee segment. The company maintained a dominant 32 per cent market share in retail health premiums.
JM Financial further highlighted that 85 per cent of new retail business originates from first-time insurance buyers — a sign of the company’s strong positioning at a time when peers are grappling with expense management norms. The insurer’s agency channel, which contributes 83 per cent of total business, reported 16 per cent year-on-year growth, while its direct-to-consumer channel surged 47 per cent.
On valuations, the brokerage observed that the stock is trading “more than one standard deviation below its mean P/E”, offering comfort amid improving profitability. “We believe these aspects would be rewarded by markets,” it said, projecting Star Health’s earnings per share at Rs 19 for FY27 and valuing the stock at 27 times FY27 earnings.
JM Financial trimmed its FY26–FY28 earnings estimates by up to 11 per cent, citing lower investment yields, but maintained its constructive stance on Star Health’s improving underwriting performance and sustainable growth trajectory.
Shares of Star Health and Allied Insurance, a key portfolio holding of investor Rekha Jhunjhunwala, rose nearly 4 per cent in Friday’s trade after the insurer reported its September quarter results on Wednesday. The rally also came after JM Financial upgraded the stock to ‘Add’ from ‘Hold’ and raised its target price to Rs 525.
The stock rose as much as 3.9 per cent to hit the day’s high of Rs 500 on the BSE, compared with the previous close of Rs 481 apiece. JM Financial’s upgrade implies an upside potential of around 9 per cent from current levels.
Rekha Jhunjhunwala, along with her late husband and ace investor Rakesh Jhunjhunwala, together held a 17.14 per cent stake in Star Health and Allied Insurance Company as of the September quarter.
The brokerage noted that Star Health’s “claims trajectory looks on track” following targeted price hikes in its retail portfolio and a sharper focus on profitable segments. “After poor claims performance in 1HFY25, the company had taken targeted price hikes in its retail portfolio and cut its loss-making corporate business, instead focusing on SMEs,” JM Financial said.
According to the brokerage, the insurer’s claims ratio improved by 130 basis points year-on-year to 71.5 per cent in the September quarter, aligning with its estimates. The combined ratio came in at 103.8 per cent, broadly meeting expectations. JM Financial expects further improvement, forecasting the claims ratio to decline to 70 per cent in Q3 and 67 per cent in Q4 as the benefits of premium hikes filter through earnings.
Star Health’s growth strategy continues to revolve around its retail business, which now accounts for 95 per cent of the total portfolio after a complete exit from the group employer–employee segment. The company maintained a dominant 32 per cent market share in retail health premiums.
JM Financial further highlighted that 85 per cent of new retail business originates from first-time insurance buyers — a sign of the company’s strong positioning at a time when peers are grappling with expense management norms. The insurer’s agency channel, which contributes 83 per cent of total business, reported 16 per cent year-on-year growth, while its direct-to-consumer channel surged 47 per cent.
On valuations, the brokerage observed that the stock is trading “more than one standard deviation below its mean P/E”, offering comfort amid improving profitability. “We believe these aspects would be rewarded by markets,” it said, projecting Star Health’s earnings per share at Rs 19 for FY27 and valuing the stock at 27 times FY27 earnings.
JM Financial trimmed its FY26–FY28 earnings estimates by up to 11 per cent, citing lower investment yields, but maintained its constructive stance on Star Health’s improving underwriting performance and sustainable growth trajectory.