This Rakesh Jhunjhunwala stock rallies 54% in a month, analysts see up to 15% more jump

This Rakesh Jhunjhunwala stock rallies 54% in a month, analysts see up to 15% more jump

Rakesh Jhunjhunwala stock Star Health and Allied Insurance Company has rallied more than 50% in a month and analysts see more upside on the stock going forward. After Star Health’s fiscal first quarter results, brokerage firms have maintained their ‘Buy’ ratings, remaining optimistic on the overall prospects of the insurance company. Star Health shares were quoting at Rs 732, down 2.2% on NSE intraday. According to the latest shareholding pattern of Star Health, Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 14.39% and 3.10% stake respectively as of 30 June 2022. Star Health is among the largest insurer engaged in health insurance segment with relatively superior market share, operating performance.Should you buy Star Health and Allied Insurance Company shares?

Healthy earnings growth, limited cyclicality risk to boost stock

Star Health to maintain leadership in retail health segment

ICICI Securities also holds a positive outlook on the stock. “Star Health is expected to maintain its leadership in retail health segment with sustainable long term growth opportunity. Steady claims ratio and 20-25% growth in premium to improve combined ratio and support RoE. We maintain a BUY rating on the stock with target price of Rs 860,” the domestic brokerage and research firm said in its note. The brokerage factors 19% premium CAGR between FY22-24, combined ratio of 95, 94% and investment yield of 7%,7.5% for FY23 and FY24 respectively. “We have upgraded our FY24 earnings to factor the renewed confidence in terms of earnings potential seen in the company’s product and distribution strategy,” it said.

Stock down 20% from 52-week high

It is worth noting that Star Health launched its IPO from November 30 to December 2 last year. The issue was not fully booked and received 79% subscription against its offered size. Star Health shares debuted on stock exchanges on 10 December 2021. The stock had hit a 52-week high of Rs 940 apiece during the initial days before correcting. Compared to its 52-week high, Star Health shares have plunged by 20% on NSE as of 31 July 2022. Meanwhile, against its issue price of Rs 900, the stock has dipped by 17%.

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