Star Health Insu Q1 FY27 Results (NSE: STARHEALTH)
Signal: Steady quarter
The read
Revenue grew 13.3% YoY, underwriting profit surged 47.7% YoY to ₹42,510 lakh as the combined ratio improved to 90.93% (82bps YoY improvement) — a multi-quarter best — driven by a healthier claims ratio (67.48% vs 68.52%). However, PAT was flat YoY at ₹43,818 lakh because investment income increase (₹64,359 lakh, +47.1%) was offset by higher insurance finance expenses and a higher tax rate versus no prior-year tax. QoQ, the company rebounded sharply from a Q4FY26 loss of ₹5,540 lakh, supported by seasonal recovery from monsoon claims. The Ind-AS transition (adopted from FY27) restated prior-period comparatives; the equity reconciliation shows a net ₹1,64,573 lakh increase in opening equity from the transition. Key positive: combined ratio below 91% for the first time in 4 quarters; key concern: flat PAT despite revenue growth signals rising expense/claims cost base.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,917.2 Cr | 13.3% | 5.3% |
| EBIT | ₹588.08 Cr | 0.0% | |
| Net profit | ₹438.18 Cr | 0.0% | |
| EPS | ₹9.34 | 0.1% |
P&L walk
Revenue growth of 13.3% YoY was driven by health segment (₹4,86,790 lakh, +13.7% YoY). Underwriting profit (insurance service result) at ₹42,510 lakh surged +47.7% YoY due to a 1.04pp claims-ratio improvement to 67.48%. Combined ratio improved 82bps YoY to 90.93% — a 4-quarter low — driven by better claims experience. Investment income jumped +47.1% YoY to ₹64,359 lakh, lifting total profit. PAT was flat YoY at ₹43,818 lakh because prior year Q1 benefited from a low base; QoQ PAT recovered from a ₹5,540 lakh loss in Q4FY26 (seasonal monsoon claims). EPS of ₹9.34 essentially flat.
Segments
Health segment drives 99.3% of segment profit (₹54,557 lakh) and 95% of revenue; Personal Accident profit ₹388 lakh, Travel profit ₹28 lakh — both small but profitable. No turnaround or inflection in minor segments.
Key positives
- Combined ratio improved to 90.93% — best in last 4 quarters — from 91.75% in FY26 full year, driven by claims ratio improvement to 67.48% (-104bps YoY).
- Underwriting profit (Insurance Service Result) surged 47.7% YoY to ₹42,510 lakh, indicating pricing discipline and better claims management.
- Investment income grew 47.1% YoY to ₹64,359 lakh, providing a cushion to operating profit.
- Solvency ratio remained comfortable at 2.09x (regulatory minimum 1.50x) — improved 4bps QoQ.
Key concerns
- PAT flat YoY (₹43,818 lakh) despite 13.3% revenue growth — insurance finance expenses rose sharply to ₹9,867 lakh (net expense) and effective tax rate was 43.6% vs around 33% earlier.
- Claims ratio increased 289bps QoQ to 67.48% from Q4's 64.59% — though part of this is seasonal (monsoon claims), it bears watching.
- Expense ratio remains elevated at 23.45% vs year-ago 23.48% — no operating leverage despite revenue growth.
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