Bearish Signs on Big Bull’s Portfolio Stock, Peers Seen at Better Valuations

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Bearish Signs on Big Bull’s Portfolio Stock, Peers Seen at Better Valuations

By Malvika Gurung

Investing.com -- Health insurer Star Health and Allied Insurance (NS: STAU ) is the first standalone listed health insurance company in India and holds a retail market share of 32% in the health insurance sector.

However, InvestingPro models see a potential downside on the mid-cap stock, with an average fair price at Rs 394.39/share, which is 27.8% lower than Star Health’s current share price.

The most bearish fair value on the Rakesh Jhunjhunwala portfolio stock is set at Rs 363.33/share by the ‘Price/Book Multiples’ model of InvestingPro. At this value, Star Health and Allied Insurance trades with a downside potential of 33.4%.

The Trailing Twelve Months (TTM) PE ratio of Star Health and Allied Insurance stands at 72.9. At this level, Star Health’s top peers could appear more attractive to investors as their TTM PE ratio is way lower than the health insurer.

The TTM PE ratio of LIC (NS: LIFI ) is at 8.5, Bajaj Finserv (NS: BJFS ) at 32.9, SBI Life Insurance (NS: SBIL ) at 68.9 and HDFC Life Insurance (NS: HDFL ) at 70.5, making all four of these financial stocks relatively better valued than Star Health at the current market price.

Late ace investor Rakesh Jhunjhunwala holds a total of 82,882,958 equity shares of Star Health and Allied Insurance, translating to a 14.3% stake in the company, as per the insurer’s latest shareholding pattern.

Rekha Jhunjhunwala, the Big Bull’s wife, holds a 3.1% stake in Star Health, or a total of 17,870,977 shares of the company, as on December 31, 2022.

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