Earnings Miss: Star Health and Allied Insurance Company Limited Missed EPS By 14% And Analysts Are Revising Their Forecasts

Star Health and Allied Insurance Company Limited (NSE:STARHEALTH) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at ₹36b, statutory earnings missed forecasts by 14%, coming in at just ₹4.42 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Star Health and Allied Insurance after the latest results.

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Taking into account the latest results, the consensus forecast from Star Health and Allied Insurance's 22 analysts is for revenues of ₹185.4b in 2026. This reflects a meaningful 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 36% to ₹13.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹187.6b and earnings per share (EPS) of ₹14.37 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Star Health and Allied Insurance

It might be a surprise to learn that the consensus price target was broadly unchanged at ₹467, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Star Health and Allied Insurance at ₹530 per share, while the most bearish prices it at ₹415. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Star Health and Allied Insurance's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2026 being well below the historical 22% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.6% per year. Even after the forecast slowdown in growth, it seems obvious that Star Health and Allied Insurance is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Star Health and Allied Insurance. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ₹467, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Star Health and Allied Insurance. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Star Health and Allied Insurance analysts - going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Star Health and Allied Insurance , and understanding it should be part of your investment process.

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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.