Shares of Star Health and Allied Insurance Company Ltd. surged by 4% on Thursday after several prominent brokerages reaffirmed their "Buy" ratings following the insurer's strong second-quarter FY27 results. The positive sentiment stemmed from significant improvements in the company's claims performance, underwriting profitability, and growth in its retail fresh business.
The stock closed at Rs 539.65, marking a 3.93% increase from its previous close of Rs 519.25, having touched an intraday high of Rs 533.15.
Brokerages Highlight Strong Q2 Performance
Three major financial services firms—Jefferies, JM Financial, and Motilal Oswal Financial Services (MOFSL)—all maintained their "Buy" recommendations, setting price targets ranging from Rs 690 to Rs 730, indicating substantial upside potential.
Motilal Oswal Financial Services (MOFSL)
MOFSL noted a robust 19% year-on-year (YoY) growth in gross written premium (GWP), reaching Rs 5,280 crore for Q2 FY27. Retail fresh GWP experienced an even stronger surge, growing 35% YoY to Rs 900 crore. The combined insurance service ratio (CISR) showed a notable improvement of 290 basis points YoY, settling at 98%.
Crucially, Star Health achieved an underwriting profit of Rs 99 crore in the quarter, a significant turnaround from an underwriting loss of Rs 40 crore in the same period last year. MOFSL subsequently raised its profit after tax (PAT) estimates by 6% for FY27 and 4% for FY28, setting a price target of Rs 690.
JM Financial's Positive Outlook
JM Financial also highlighted an underwriting profit of approximately Rs 100 crore in Q2 FY27, contrasting sharply with the Rs 40 crore loss reported in Q2 FY26. The brokerage observed an improved claims ratio of 69% and an expense ratio of 29%. Consequently, JM Financial revised its earnings per share (EPS) estimates upwards for FY28 and FY29, maintaining its "Buy" rating with a 12-month price target of Rs 700.
Jefferies Sees Continued Improvement
Jefferies pointed to the fifth consecutive quarter of year-on-year improvement in the claims ratio, with the CISR improving by 290 basis points to 98%. The firm also emphasized the 35% YoY growth in retail fresh gross written premium and an increasing share of new-to-insurance customers. Jefferies anticipates gross written premium growth of around 15% in the second half of FY27 and forecasts a further 80-basis-point improvement in the loss ratio over the next two years, retaining its "Buy" rating and a price target of Rs 730.
The collective endorsements from these leading brokerages underscore a positive outlook for Star Health, driven by its consistent operational improvements and strong financial performance.