Star Health Insu (STARHEALTH)

FairStock Score: 54/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Low debt/equity of 0.07 with positive free cash flow of ₹228 Cr provides a financial cushion.
• Piotroski F-Score of 7/9 suggests solid operational and accounting health despite profit decline.
• Promoter holding of 57.98% keeps management aligned with minority shareholders.
• Sales growth of 9.87% and latest quarterly revenue of ₹4,566 Cr show the top line is still expanding.

Concerns

• Profit growth is -43.36%, yet P/E is 61.39, making valuations very expensive on current earnings.
• ROE of 6.32% is poor relative to the 4.30 price-to-book ratio; investors are paying richly for weak capital compounding.
• No dividend yield means shareholders get zero cash return while waiting for uncertain growth.
• Graham Number of ₹143.61, DCF value of ₹4.48, and Altman Z-score of 2.05 all point to insufficient margin of safety and balance-sheet caution.

AI Analysis

At ₹516, Star Health is priced for perfection, but the numbers show a business that has not earned that right. As Graham taught, the margin of safety is absent: the Graham Number is ₹143.61 while the price is ₹516.40, and the supplied DCF value of ₹4.48 is nowhere near the quote. I can accept that a health insurer may command a premium for growth; however, profit growth is minus 43.36%, ROE is only 6.32%, and there is no dividend. A business generating 9.87% revenue growth and ₹128 crore quarterly profit on ₹4,566 crore of sales is not a wonderful franchise. The low debt-to-equity of 0.07 and positive free cash flow of ₹228 crore are good, but they do not justify paying 61 times earnings. I would want to clearly understand why profits collapsed before considering it. The Piotroski score of 7/9 suggests the balance sheet is not deteriorating, and promoter holding at 57.98% is good, but Mr. Market is asking me to pay 4.30 times book value for a 6.32% ROE. That is poor capital compounding unless the cycle turns. Star Health operates in general insurance, a competitive, claims-heavy business where underwriting discipline matters more than growth. The Altman Z-score of 2.05 is another yellow flag. For a Buffett-Graham investor, the fundamentals are overshadowed by valuation. I would watch for margin improvement, ROE recovery, and evidence that the profit decline is temporary. Until then, this is a mixed story at an unappetizing price. I would keep it on the shelf.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer