Star Health and Allied Insurance Company Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Star Health and Allied Insurance Company Limited (NSE:STARHEALTH) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.5% to ₹601. The results were mixed; although revenues of ₹43b fell 12% short of what the analysts had predicted, per-share (statutory) earnings of ₹9.33 beat expectations by 42%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the 19 analysts covering Star Health and Allied Insurance are now predicting revenues of ₹212.6b in 2027. If met, this would reflect a meaningful 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 92% to ₹21.86. Before this earnings report, the analysts had been forecasting revenues of ₹215.4b and earnings per share (EPS) of ₹17.76 in 2027. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

View our latest analysis for Star Health and Allied Insurance

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.5% to ₹637. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Star Health and Allied Insurance analyst has a price target of ₹760 per share, while the most pessimistic values it at ₹440. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Star Health and Allied Insurance's growth to accelerate, with the forecast 21% annualised growth to the end of 2027 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Star Health and Allied Insurance to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Star Health and Allied Insurance following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Star Health and Allied Insurance going out to 2029, and you can see them free on our platform here.

You can also see our analysis of Star Health and Allied Insurance's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.