Star Health and Allied Insurance has achieved a significant milestone by breaking out from a multi-year resistance band placed around ₹550-560 levels to hit a fresh 52-week high. According to The Economic Times, this breakout signals improving momentum and has prompted experts to recommend a buy for medium-term traders targeting ₹800 within the next 2-3 months. The stock's recovery from a previous downtrend and bullish technical indicators support this optimistic outlook for the general insurance sector leader.
Motilal Oswal has issued a buy rating on Star Health and Allied Insurance with a target price of ₹700 in its research report dated June 25, 2026. The brokerage's analysis positions the company to benefit from the rapidly growing retail health insurance segment, which has witnessed stellar growth of ~30% in 2HFY26. With the stock now trading near its 52-week high, the recommendation appears particularly timely given the technical breakout and strong fundamentals supporting the insurance leader.
As reported by Motilal Oswal, Star Health holds the position as the largest retail health player with 30%+ market share since FY21. The company's retail health GWP growth trajectory has improved significantly, rising from 17% CAGR over FY21-26 to 20%+ since October 2025. The number of lives covered has demonstrated consistent growth with a 12% CAGR over FY20-25, compared to 7% for the industry. This strong performance has now translated into the stock's technical breakout, validating the company's market leadership position.
According to the research report, Star Health experienced unfavorable claims experience in FY25 with a retail loss ratio of 69.2% versus 65.8% in FY24. However, the company's underwriting performance has recovered substantially, with the retail loss ratio improving to 68.2% in FY26. This recovery was supported by strong fresh business growth of 37% YoY in FY26 and calibrated repricing actions, demonstrating the company's ability to manage claims effectively while maintaining growth momentum.
Motilal Oswal estimates a CAGR of 16% in IFRS insurance revenue and 32% in PAT during FY26-28. The brokerage projects the CISR to improve to 98.3% in FY28E. The target price of ₹700 values the company at 26x FY28E IFRS PAT, reflecting confidence in the company's growth trajectory and market position. The retail health insurance segment, identified as the fastest-growing non-life insurance segment with 18% CAGR during FY20-25, continues to benefit from rising healthcare inflation, improving awareness, increasing middle-class penetration and GST exemption. As noted by Motilal Oswal, penetration at less than 5% of Indian population leaves a long runway for steady high-teen growth, positioning Star Health well for continued expansion in this market.
