Rakesh Jhunjhunwala stock: Star Health share beats target price estimates; jumps 10% intraday, yields 48% return in one month

Rakesh Jhunjhunwala stock: Shares of Star Health and Allied Insurance Company rose more than 10% in BSE intraday trade on Wednesday. The counter rose 10.23% on its previous closing to trade on the day's high value of Rs 769 per share. In the last one month, the stock has risen around 48% on the BSE as on July 27, as per technical data of Star Health and Allied Insurance Company.  

With the massive return in the past one month amid volatility in the market, the insurance share, one of the stocks in Rakesh Jhunjhunwala's portfolio, has been able to beat the estimates of ICICI Securities.  

Star Health share target price: Beating the estimate 

The domestic brokerage, in its report on July 3 earlier this month, had assigned a buy rating on the counter with a target price of Rs 700 per share in one year, which has been met by the stock in less than one month.  

The jump in the share price of the insurance firm comes amid positive recommendations of the sector in general by brokerages.   

"Retail health is a high growth business with high entry barriers. This is proved by the fact that retail health premiums have grown by 20% CAGR over the last 5 years and no player has been able to grow its market share meaningfully apart from Star Health and Care Health over the last 5 years," ICICI Securities had said in its report.  

In such an industry scenario, STAR is a distant market leader in retail health (31% as of FY23-TD based on monthly GDPI data released by General insurance council) and well entrenched with 550k agents, 12,820 network hospitals and 807 branches, said the brokerage.  

Recommending a buy on the stock, it had said that the high share of PSU insurers with low solvency continues to provide a growth opportunity for strong players like Star.  

"Our estimates factor lower end of the earnings estimates. We believe the fear of business impact on life insurers selling retail health indemnity is overdone. Maintain BUY," it added.  

Rakesh Jhunjhunwala holding in Star Heath 

Ace investor Rakesh Jhunjhunwala and wife Rekha Jhunjhunwala jointly hold a promoter's stake of 17.5% in the insurance company in the quarter ending June 2022, according to stock exchanges data. In terms of number of shares, the stake translates into 100,753,935 shares of the company. Of the total number of shares, Jhunjhunwala holds 82,882,958 shares (14.4%) and his wife has 17,870,977 shares (3.1%).   

Rakesh Jhunjhunwala Portfolio 

As per the latest corporate filings, the Big Bull of the Indian market Jhunjhunwala holds 32 stocks in the quarter ended June '22. The value of the stocks in Rakesh Jhunjhunwala and Associates has been pegged at a little over Rs 30,073.6 crore by stock market analysis portal trendlyne.com. 

Star Heath IPO  

The counter had seen a huge correction since its discount listing on the exchanges. The stock had debuted at Rs 848.80 per share, a discount of 6% against IPO price of Rs 900 per share, on the BSE in December last year.